Industrial metals continued their gains in yesterday’s trading, with LME copper approaching the $11,000 per tonne level amid a weak US dollar. Expectations are growing that the Federal Reserve will cut interest rates at its December meeting again. The market is pointing to a cut of more than 80%, up from about 30% a week ago, ING commodities experts Ewa Manthey and Warren Patterson noted.
Bets of interest rate cuts by the Fed are boosting industrial metals
“Supply-side dynamics have added additional support to copper. Chile’s Codelco, the world’s largest copper producer, is pushing for a sharp increase in annual premiums for refined copper shipments to Chinese customers. Market sources point to offers of US$335 per tonne above LME prices for 2026 contracts, with some buyers reportedly bidding as high as US$350 per tonne during negotiations in Shanghai, Bloomberg reported.”
“This represents a significant jump from the US$89 per tonne premium agreed for 2025, underscoring concerns about potential shortages. Last week, Codelco offered a record US$330 per tonne premium to customers in South Korea.”
“At the same time, investor positions reflect caution. According to the latest Commitments to Traders (COTR) report from the LME for the week ending November 21, net long positions for aluminum fell by 14,978 contracts to 111,129 contracts. This represents the lowest bullish position since early July. Copper saw net bullish bets fall by 10,500 contracts to 64,853 contracts, the lowest level since late September Zinc positions were cut by 1 second for a consecutive week, down 2,774 contracts to 28,638 contracts, the weakest since mid-October.”
