The metals market is splitting as Copper and Aluminum stay supported by real supply stress, while Nickel and Zinc face inventory pressure
📌 Base metals are no longer moving as a broad rally. The LME Metals Index reached a new record, led by Copper and Aluminum, but the deeper signal is divergence between metals facing physical tightness and those still pressured by refined surplus.
💡 Aluminum has become the key highlight, rising to a 4-year high near 3,650 USD/ton. The LME cash–3m spread moved above 80 USD/ton, showing the tightest nearby conditions since 2022, while inventories remain low around 346,000–351,000 tons.
🔎 Copper remains well supported by power infrastructure, AI demand, and industrial supply chains. Strong nearby backwardation shows buyers are still paying a premium for immediate delivery, even as LME stocks fluctuate around 397,000–400,000 tons.
⚠️ Nickel and Zinc are weaker by comparison. Nickel is capped by high inventories, while Zinc faces expectations of a 2026 surplus as mines in Australia and Peru restart production. Without a fresh supply shock, both are more likely to move sideways or correct.
⛓️ Sulfuric acid is becoming a new bottleneck. China’s export halt has pushed spot acid prices up by more than 100%, pressuring copper leaching in Chile and HPAL nickel production in Indonesia. This also raises costs across the battery metals chain.
📈 China’s import data still points to firm physical demand. Copper concentrate and aluminum imports rose strongly in Q1–Q2, while silver imports hit a record 836 tons in March, up 173%, bringing Q1 total imports to 1,626 tons.
✅ The short-term view favors a selective rally rather than a broad bull market. Copper and Aluminum remain better supported if backwardation holds, while Nickel and Zinc need stronger catalysts. Next week, focus will be on LME stocks, sulfuric acid prices, and China restocking.