Copper, aluminum, zinc, nickel, tin, lead—as the prices of the six major industrial metals primarily tracked by the LME rose across the board on Tuesday, global financial markets are once again being swept by a fierce "metal whirlwind" at the start of the new year.
Market data shows that LME copper futures hit a further record high on Tuesday, while LME nickel futures surged by more than 10% at one point to their highest level in 19 months, as supply concerns fueled the rally in industrial metals. The most explosive performer on Tuesday was undoubtedly "wild nickel." By the close, LME nickel futures had risen nearly 9%, after an intraday jump exceeding 10%, touching a high of $18,785 per tonne, its highest since June 5, 2024. The rapid ascent of this metal, used in battery and stainless steel production, comes as Indonesia, the world's largest nickel supplier, plans to curtail ore output. ING Groep NV analyst Ewa Manthey stated that this measure is very effective at boosting prices in the short term. However, she added, "With a significant surplus still expected by 2026, the rally is unlikely to be sustained unless supply restrictions deepen or demand sees a meaningful improvement." Regardless, for a nickel market that has been plagued by oversupply from Indonesia and weaker-than-expected demand for nickel in electric vehicle batteries, Tuesday's sharp rise serves as a strong stimulant. This also marks a recovery for the LME nickel contract, which saw trading volumes plummet significantly after experiencing a historic short squeeze in 2022. Trading dynamics observed by industry insiders indicate that Chinese investors have played a significant role this week in driving substantial gains for metals including nickel, copper, and tin: metal prices surged during the LME's Asian trading hours accompanied by high volume, and strengthened again after the opening of the night session on the Shanghai Futures Exchange. Beyond nickel, LME copper futures also rose 1.9% on Tuesday to $13,238 per tonne, after climbing as much as 3.1% intraday to set a new record high of $13,387.50. Although only a few trading days have passed since the start of the year, copper has already gained approximately 6.5% so far in 2026. "The momentum for copper to break through $13,000 stems from the growing imbalance between structural supply tightness and accelerating demand from electrification and data center investments," said ING's Manthey. "Years of underinvestment and persistent mine disruptions have left the market with little buffer." A strike at Capstone Copper's Mantoverde copper-gold mine in northern Chile has also intensified copper supply worries. Further adding to supply pressures, Tongling Nonferrous Metals Group announced on Sunday a delay in the commissioning of the second phase of its mine project in Ecuador. US President Trump has now instructed the US Department of Commerce to submit an updated report on the US copper market by the end of June, when a decision on refined copper tariffs is expected. The Commerce Department had previously proposed tariffs starting at 15% from 2027, rising to 30% in 2028, but the White House has not confirmed this timeline. This is further leading to the spread of a phenomenon where the US "siphons" global copper supplies. US copper inventories are currently surging, with stocks tracked by the COMEX exceeding 500,000 short tons after 44 consecutive days of net inflows. In sharp contrast, copper inventories in LME warehouses have nearly halved over the past year. Citigroup on Tuesday raised its first-quarter copper price target to $14,000 from a previous $12,000, but maintained its baseline forecast for the rest of the year unchanged at $13,000. "We are tactically bullish on copper over the coming weeks," the bank said in a report. UBS analyst Aditi Samajpati wrote in a brief note to clients, "On Tuesday, copper prices extended gains to surge to a historic high, primarily driven by tariff uncertainty and ongoing supply disruptions, prompting a scramble to ship copper to the US. US premiums are exacerbating global inventory imbalances, with US stocks building up while the rest of the world faces tight supplies. As copper plays a key role in the energy transition and mines in Chile, Indonesia, and the Congo continue to face setbacks, investors are betting on further metal price increases, and speculative trading has intensified accordingly." In a separate report, UBS analyst Dan Major noted, "Net speculative positions are high; copper is famously the commodity everyone wants to own." Prices of other industrial metals also saw widespread and significant gains on Tuesday. Among them, LME tin futures rose 4.8% to $44,526, after hitting their highest level since March 2022. LME aluminum futures advanced 1.4% to $3,129 per tonne, reaching their highest since April 2022 intraday; LME zinc futures gained 1.8% to $3,251, touching their highest since October 2024 intraday; LME lead futures increased 2.6% to $2,076.
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