Key Moments
- Copper and Aluminium edged higher after reduced near-term geopolitical risk, even as the Strait of Hormuz remained closed.
- Aluminium drew support from supply disruptions in the Middle East, a region accounting for around 9% of global production.
- Copper supply risks increased due to potential sulphuric acid shortages from shipping disruptions and China’s planned export suspension from May.
ING Strategists Flag Cautious Outlook for Base Metals
ING strategists Warren Patterson and Ewa Manthey outlined a guarded environment for base metals, noting that Copper and Aluminium moved higher following a reduction in near-term geopolitical tensions, while structural and logistical challenges continued to weigh on the broader complex.
The strategists pointed to pressure on demand driven by high energy costs, even as a series of supply-side issues lent support to prices, particularly in Aluminium and Copper.
Geopolitics: Ceasefire Extension vs Strait of Hormuz Closure
“Copper and aluminium edged higher yesterday after US President Donald Trump extended the Iran ceasefire indefinitely, reducing near-term geopolitical risk.”
“However, the Strait of Hormuz remains closed, with Tehran signalling it will not reopen the route while the US blockade persists.”
“Signals across the metals complex remain mixed.”
Aluminium Supported by Middle East Disruptions
The analysts highlighted that Aluminium has been underpinned by regional supply interruptions.
“Aluminium has found support from supply disruptions in the Middle East, which accounts for around 9% of global output.”
| Metal | Key Driver | Regional/Structural Factor |
|---|---|---|
| Aluminium | Supply disruptions | Middle East – around 9% of global output |
| Copper | Supply risk | Sulphuric acid availability and China export plans |
Copper Supply Risks Intensify
The outlook for Copper supply was described as increasingly fragile due to several converging factors.
“Copper supply faces growing risks, amid potential sulphuric acid shortages due to shipping disruptions and China’s planned export suspension from May.”
Mixed Picture Across the Base Metals Complex
Patterson and Manthey emphasized that the signals for the broader base metals market remained unclear, as geopolitical developments, logistical bottlenecks, and elevated energy costs interacted with localized supply disruptions.
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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