According to a research report, last week saw a significant rise in crude oil prices due to impacts from Middle East geopolitical events, with ongoing uncertainty ahead. Heightened market concerns about inflation have weighed on the performance of precious metals prices. Meanwhile, weaker-than-expected U.S. employment data and a softer economic outlook suggest that interest rate cuts by the Federal Reserve will continue once geopolitical conflicts subside. Additionally, persistent central bank gold purchases and a relatively stable U.S. dollar index support the unchanged long-term outlook for precious metals.
Key views are outlined as follows:
Copper: Unexpectedly weak U.S. non-farm payrolls data have boosted expectations for rate cuts, supporting copper prices alongside recovering consumption. On the macro front, the surprising slowdown in February U.S. job growth has partially offset liquidity tightening pressures from U.S.-Iran tensions. On the supply-demand side, copper concentrate treatment charges continue to decline, reflecting tight ore supply, though rising sulfuric acid prices have alleviated some smelting pressure. Post-holiday, full resumption of corporate operations combined with lower copper prices has significantly stimulated downstream restocking demand, narrowing the spot discount. With slower accumulation in domestic social inventories, copper prices are expected to fluctuate.
Aluminum: Escalating Middle East conflicts have raised supply contraction concerns, pushing LME aluminum prices to a near four-year high. Macro uncertainties have heightened risk-off sentiment. Supply disruptions are frequent, with Qatar Aluminum halting production due to suspended natural gas supply and Bahrain Aluminum facing transport obstacles amid regional tensions. Additionally, a Mozambique aluminum plant previously announced maintenance-related shutdowns due to power contract issues. Demand remains in a recovery phase, and domestic social inventories continue to accumulate. If geopolitical tensions persist, expectations of tighter global aluminum supply could strongly support price increases.
Tin: Weak supply-demand fundamentals are compounded by macroeconomic factors amplifying price volatility. Progress in water pumping at Myanmar mines and resumed exports from Indonesia, coupled with the restart of domestic smelters in March, point to marginally looser supply. Downstream firms have resumed operations gradually, but new orders remain subdued. High inventory levels and uncertainty around export controls on AI chips are dampening market sentiment, suggesting tin prices may experience high volatility.
Energy Metals: Demand remains robust, though the pace of inventory drawdown has slowed. Lithium carbonate: Inventories have declined for two consecutive weeks post-holiday, following five weeks of drawdowns before the holiday. Production has risen steadily, and demand remains strong. Expectations of reduced export tax rebates for battery products may pull forward battery demand. Supply disruptions from Zimbabwe’s export policies warrant close monitoring. Cobalt: Upstream supply tightness continues to support high offers, while downstream buyers remain cautious. Many cobalt firms are expanding into downstream battery sectors, building integrated cost advantages from cobalt-nickel-precursor-cathode materials and strengthening competitive barriers.
Rare Earths: Prices have declined month-on-month. Throughout the week, light rare earth praseodymium-neodymium oxide prices showed signs of stabilization in the latter half, while heavy rare earth prices continued to weaken. The long-term investment value of rare earths as strategic resources remains favorable.
Strategic Metals: Value is becoming more prominent. Tungsten: Strategic premiums combined with supply-demand mismatches make price declines unlikely. Macro strategic controls and long-term contract pricing have driven tungsten concentrate prices higher. Supply is extremely tight due to production quotas and delayed post-holiday resumption, while strong overseas demand supports smooth cost pass-through. Uranium: The February long-term contract price for natural uranium reached $90 per pound, up from January. Rigid supply and nuclear power development support a persistent supply-demand gap, suggesting further price increases. Tantalum: Repeated accidents in the Democratic Republic of Congo mines are prolonging supply shortages, leading to a spike in tantalum concentrate prices. Growing demand from AI servers, semiconductors, and other emerging industries is expected to keep tantalum prices elevated.
Risks include weaker-than-expected downstream demand, substantial supply increases, and slower-than-anticipated Fed rate cuts.
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