Written Commentary
BASE METALS
Copper: LME copper edged 0.1% higher to $14,025; US prices are little changed at $6.4310. A weaker dollar and strong Chinese import demand supported prices, while concerns about a slower US data-center buildout limited gains. China’s Yangshan import premium rose to $210 per ton, matching its 2013 record and underscoring tight availability in the physical market.
Regional inventory imbalances remained pronounced. US warehouses held 223,300 tons, or 70.1%, of LME copper stocks, the highest US share since March 2019, while COMEX inventories reached a record 732,315 tons. As the COMEX premium over LME prices narrowed, more metal moved into US-based LME warehouses, where it can be stored without first clearing customs. The concentration of inventories in the US contrasts with strong Chinese import premiums, highlighting that rising exchange stocks do not necessarily imply readily available supply elsewhere.
Ivanhoe Mines cut its 2027 copper production forecast for its Kamoa-Kakula mine in the DRC a second time this year, expecting mine production to fall from 380,000 to 420,000 metric tons to 300,000 to 350,000 tons. Its initial forecast ranged 500,000 to 540,000 before a more cautious mine plan emerged in March.
Zinc: Zinc rose 0.9% to $3,840.
Aluminum: Aluminum rose 1.6% to $3,097.
Tin: Tin advanced 1.7% to $47,775.
Lead: Lead added 0.9% to $1,898.
Nickel: Nickel rose 3% to $16,255. Indonesia announced action against companies linked to a major ore trader over alleged illegal operations in forest areas and possible licensing irregularities. The announcement added to existing supply concerns stemming from tighter Indonesian mining quotas, rising costs and coordinated production cuts. Macquarie expects Indonesia’s exports of nickel and nickel products to decline approximately 6% this year, with attention increasingly turning to the country’s 2027 ore quotas. The extent of any additional disruption from the enforcement action remains uncertain.
PRECIOUS METALS
Gold: December gold contracts continued higher, up over 1.5% as gold has emerged as a strong benefiter of the results of US midterms. Mainly, a sharp drop in oil prices over expectations that the conflict may wind-down due to the administration’s acknowledgement that the war cost Republicans the election has been the catalyst for this thinking. Additionally, falling Treasury yields and a weaker dollar have benefitted buying conditions as well. Markets priced an 81% probability of a December increase, up from 77% on Wednesday. Wednesday’s ISM services report offered a mixed backdrop. The headline index slipped to 54.5 from 54.9, below expectations of 54.8, as business activity and new orders slowed. Employment improved, however, and the prices index remained elevated at 73 despite a modest decline. Respondents’ warnings about incomplete pass-through of tariff and fuel costs suggest that softer activity has not eliminated inflation risks. Friday’s payrolls will be central to determining whether labor-market resilience continues to justify another increase.
Silver: December contracts are up 1.3% to $52.965.
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