Theme of the Day: Base metals show resiliency

Base metals are having a broad rally: investment capital is flowing into the space, the Iran-US conflict is reinforcing scarcity narratives, and AI-driven demand stories are running through much of the metals complex. Big money keeps pouring into AI despite the turmoil. Copper, tin and zinc are fundamentally tighter than the rest of the complex, with copper and zinc in a wide cash-to-three-month backwardation. Tariff uncertainty continues to draw material toward the US, while Chinese apparent demand looks set to stay firm. Tight raw material markets are underpinning record high copper cash prices - copper concentrate TC/RCs hit another all-time low last week, falling below $-170/t for the first time, to $-172.92/t from $-159.67/t. It remains unclear what decision the US administration will make on copper tariffs. However, the arbitrage continues to be broad, reaching over $600/t in the last week. This drags material into the US and adds to global tightness. The decision on US copper tariffs has been repeatedly delayed over the past 18 months. This delay may suit the US administration in two ways: it has kept domestic copper prices elevated, offering similar support to local producers as a tariff would, and the resulting uncertainty has drawn in significant copper volumes, creating something close to a de facto stockpile. In theory, the administration is required to act on the investigation within 90 days, but with no penalty for missing that deadline, delays persist. Nearby availability therefore remains tight; the cash-to-three-month backwardation has narrowed to roughly $151/t. Zinc mirrors copper's tight concentrate market - but here it is translating directly into tight refined supply, without scrap to fall back on as easily as copper can. Zinc remains fundamentally tighter, with the cash-to-three-month backwardation widening to around $200/t and the three-month price holding near $3,900/t. Tin is tracking copper's AI data centre narrative - outweighing the ongoing supply recovery in Myanmar and the DRC. On the supply side, attention remains focused on Indonesia, where exports are showing tentative signs of recovery. Meanwhile, plans for a new commodity exchange could have broader implications for the country's tin trading and export framework. Aluminium, nickel and zinc are all being impacted by the Iran-US conflict through energy prices, plus their own supply pressures: smelter worries (aluminium), Iranian concentrate challenges (zinc), acid tightness (nickel). Investment money is actively targeting aluminium and tin, drawn by the AI and Middle East narratives. The same forces are pulling the whole complex up.