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Daily Base Metals Report

LME Tightness Unwinds as Copper and Zinc Retreat

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Senior Research Analyst

Contact research Contact Industrial Commodities

Summary

  • US yields slipped to 4.0% while risk sentiment remained cautious.
  • Metal spreads unwound today but failure to return to contango underscores lingering stress in the market.
  • Gold hit new highs, silver softened.

Macro

US equities opened lower on Tuesday, extending last week’s cautious tone as geopolitical uncertainty and weak sentiment kept risk appetite subdued. Markets continued to monitor diplomatic efforts aimed at easing tensions in the Middle East, though resolution of the Israel-Hamas conflict remains uncertain. The dollar eased slightly against major currencies, with the index hovering around 99.15, while Treasury yields extended their decline, with the 10-year testing support near 4.0%.

In Europe, French PM Sébastien Lecornu moved to freeze the planned pension reform that would have lifted the retirement age to 64, easing political tensions and averting a potential collapse of his minority government. The decision, aimed at securing Socialists support, signals a tactical retreat as the administration prioritises stability over structural reform ahead of the 2027 election.

In the UK, a sharp fall in employment pushed the jobless rate to 4.8%, the highest in nearly four years, prompting markets to bring forward expectations for the next BoE rate cut to March 2026.

Base Metals 

Base metals weakened today as markets unwound yesterday’s spread tightness, prompting a correction across the complex. The violent backwardations seen yesterday eased, releasing pressure from near-dated contracts into the forward curve. Copper cash to 3-month narrowed from above $200/t to around $40/t backwardation. Aluminium followed, softening from $22/t to $3.70/t. With neither metal fully back into contango, this suggests residual tightness is still in play.

Copper experienced another volatile session, mirroring Friday’s swings, falling from $10,800/t towards $10,578/t. Aluminium slipped back below the $2,750/t level to $2,737.50/t. Zinc absorbed the sharpest impact, as cash to 3-month collapsed $200/t to $115/t, dragging prices back below the critical $3,000/t benchmark to $2,941.50/t, levels last seen in September. Lead extended its decline for the third consecutive day to $1,982/t. Nickel dipped below $15,120/t.

We believe that if spreads stabilise, attention might shift back to fundamental drivers such as the dollar and inventory flows. However, the market’s failure to return to contango today underscores lingering tightness, which still needs to unwind before this narrative can emerge.

Precious Metals and Oil

Gold surged to fresh record highs above $4,130/oz, extending its impressive rally. Silver eased modestly today, trading around $51.4/oz. Oil prices also retreated, with WTI slipping to $58.5/bbl and Brent near $62/bbl.

All price data is from 14.10.2025 as of 17:30

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

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