Written Commentary
BASE METALS
Copper: LME copper rebounded 0.8% to $13,793; US prices are up 0.67% to $6.2765. Stronger AI-related equities allowed investors to refocus on tight physical conditions in China. CoreWeave’s results eased immediate concerns about infrastructure demand, partially reversing the pressure that followed last week’s election-driven reassessment of the AI investment outlook. The recovery nevertheless followed a 1.6% decline Tuesday and copper’s weakest weekly performance since March.
Chinese supply tightness remained pronounced. The Yangshan import premium held at a record $230 per ton for a third consecutive day, reflecting limited seaborne arrivals and reduced domestic smelter output. Separately, Bloomberg reported that Shanghai spot premiums had tripled over two weeks to 2,615 yuan per ton, while the SHFE December–January spread widened beyond 1,200 yuan, its largest backwardation since 2005. These are distinct measures, but collectively point to strong demand for immediately available metal. High Chinese premiums have reportedly made shipments from the US back to China economically viable on paper. However, the potential value of retaining metal in the US ahead of possible tariffs remains an obstacle. Greater clarity that tariffs will not proceed could encourage those flows.
Zinc: Zinc rose 0.9% to $3,744.
Aluminum: Aluminum rose 1.7% to $3,062. The LME cash premium over the three-month contract widened to $129 per ton, its highest in 30 years, as available warehouse inventories declined. The sharp backwardation highlights immediate delivery pressure even as the longer-term supply outlook becomes less restrictive. Recovering Middle Eastern production and new Indonesian capacity remain potential constraints on sustained price gains. Aluminum Bahrain reported a 38% quarter-on-quarter increase in third-quarter production, illustrating the recovery in regional supply, although sales declined. Rising Chinese exports and hopes of de-escalation in the Middle East also contributed to Tuesday’s weakness. Available LME stocks as of Tuesday stood at 207,525 tons, down 51% since the Iran war began in late February and the lowest since March 2025. Nearly all of that metal (99.98%) is Russian-origin, which many Western traders avoid. Shanghai stocks fell 31% last week to 132,605 tons. A Reuters poll forecasts a 2027 surplus of 410,000 tons, compared with a 2026 deficit of 720,000 tons.
Tin: Tin advanced 1.2% to $46,850.
Lead: Lead was little changed at $1,878.
Nickel: Nickel gained 0.7% to $16,135.
PRECIOUS METALS
Gold: December gold slipped as a stronger dollar and higher Treasury yields offered pressure, though the metal found support at the $4,000 level. Governor Waller’s willingness to consider a larger increase, alongside hawkish comments from other officials, reinforced the interest-rate headwind for bullion. Friday’s PPI report is the next test of that outlook. Money markets are now fully priced for a hike in December and March and see nearly 75 bps of tightening over the next 12 months. Broadly, the inflation and Fed outlook will act as a headwind for gold prices over the medium term, though we view dips below $4,000 as solid buying opportunities. Central-bank buying provides a separate source of support. According to World Gold Council data, China added approximately 25.8 metric tons to its gold reserves in October, its largest monthly purchase in three years.
Silver: December contracts are up 2.1% to $52.300.
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