Base metals witnessed a mixed and volatile trading tone on Thursday, 23 April influenced by changing global signals that maintained fragile sentiment. Initially, prices found support from hopes regarding a possible extension of the ceasefire in Iran, but those gains diminished as uncertainty surrounding the discussions and escalating geopolitical tensions affected risk appetite.
Copper prices drove the activity, retreating from its highest levels in over seven weeks as the U.S. dollar increased in value. The three-month contract on the London Metal Exchange (LME) fell by 0.23% to $13,292.50 per tonne after earlier rising to $13,481.50, its peak since late February, according to Reuters news report.
Meanwhile, on the Shanghai Futures Exchange, copper ended slightly higher, with a 0.30% increase, although it reduced larger intraday gains.
Aluminium prices exhibited a softer trend, decreasing by 0.30% on the LME and 0.12% on the SHFE, reflecting a cautious outlook on demand due to rising energy costs.
In contrast, zinc prices demonstrated some divergence, dropping 0.69% on the LME but increasing by 0.52% in Shanghai, highlighting regional differences in demand, according to Reuters news report.
Similarly, base metals prices in domestic futures trade in domestic market traded mixed, with, aluminium prices edged higher, rising marginally by 0.01% to ₹371.50 per kg on the Multi Commodity Exchange (MCX), as fresh positions were built amid a positive spot market trend. The May contract gained 5 paise in a turnover of 240 lots.
In contrast, zinc prices declined by Re 1, or 0.29%, to ₹345.65 per kg for May delivery, as participants trimmed positions following weak spot market cues. The contract recorded a business turnover of 294 lots.
Copper prices also moved lower, slipping ₹3.75, or 0.29%, to ₹1,296.30 per kg in futures trade. The decline was attributed to muted demand in the domestic spot market, with the May contract seeing a turnover of 2,188 lots.
Base metals – Outlook
Balaji Rao Mudili, Research Analyst at Bonanza, said the rally in base metals is being driven by a combination of structural supply deficits and geopolitical disruptions. He noted that aluminium has been particularly impacted by tensions around the Strait of Hormuz, with the Persian Gulf accounting for nearly 9% of global primary aluminium output. Supply has been disrupted due to damage to refineries in the UAE and Bahrain, and Emirates Global Aluminium indicating it could take up to a year to fully restore output. Beyond geopolitics, structural factors such as China’s aluminium capacity ceiling and strong demand from EVs, solar, and grid infrastructure continue to support prices.
On copper, Mudili highlighted multiple supply-side pressures, including disruptions at Indonesia’s Grasberg mine and operational setbacks in Congo. Declining ore grades and strong demand from electrification, data centres, and AI infrastructure further tighten the market.
For zinc, he noted the recent rally reflects supply concerns and expectations of reconstruction demand in the Middle East, but warned that rising supply and subdued demand in China could lead to oversupply later in the year, making the current strength largely a catch-up move.
Adding to this, Antu Eapen Thomas, Senior Research Analyst at Geojit Investments Limited, said the recent strength in base metals is largely supply-driven rather than demand-led. Tight inventories and supply constraints have supported prices, though a hawkish stance by the Federal Reserve and a stronger dollar could pose near-term headwinds.
He added that aluminium prices may remain firm in the near term due to supply disruptions, though they could moderate as production normalises over the next few quarters. Copper, meanwhile, continues to face a structural deficit amid limited mine additions and robust demand, keeping prices elevated. For zinc, he expects prices to consolidate around current levels, supported by tight inventories, with limited downside unless demand weakens sharply.
NS Ramaswamy, Head – CRM & Commodities at Ventura Securities, remains constructive on base metals with a positive short-term outlook across copper, aluminium, and zinc on the Multi Commodity Exchange.
For copper, Ramaswamy maintains a buy view at the current market price of ₹1,276, with an upside target in the range of ₹1,300–1,350, while placing a stop-loss at ₹1,200. He believes the metal is likely to gain on improving sentiment and supply-side concerns.
On aluminium, the outlook is also bullish, with a buy recommendation at ₹372. The metal is expected to move towards ₹410–450 in the near term, with a reversal level placed at ₹340, supported by supply disruptions and firm demand trends.
Zinc too carries a positive bias, with a buy call at ₹348 and an expected price range of ₹370–380. The reversal level is seen at ₹330. Overall, Ramaswamy expects base metals to remain supported in the near term, driven by supply tightness and global cues.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
