The London Metal Exchange (LME) Week discussions revealed a mixed outlook for base metals, with copper demand expectations contrasting sharply with bearish sentiment for European aluminium in 2027. Copper prices hit record highs above $14,000 per tonne in September, but physical demand weakened as buyers pulled back. Tanja Winter, head of sales at Aurubis, noted that customers stopped fulfilling forecasts when prices peaked, highlighting a disconnect between demand and purchasing behavior.
Smelter margins for copper are under pressure due to expanding smelting capacity, particularly in China, and slower mine supply growth. Aurubis reported paying $1,500 per tonne to process concentrates into metal, a situation Winter described as "not healthy." Fastmarkets' data showed smelters paying about 5.7 times more per tonne for spot concentrates than a year earlier. Some Asian smelters are considering cuts due to record-low treatment charges (TCs).
Near-term aluminium tightness in Europe was supported by the Canada-US tariff dispute, but the outlook for 2027 turned bearish with expectations of increased metal flows from the Middle East and Asia. Fastmarkets assessed the aluminium P1020A premium in Rotterdam at $560-590 per tonne, up from the previous week. Traders anticipated a deal between Canada and the US but remained uncertain about the timing.
The alumina market saw cautious bullish sentiment due to high-level deals and extreme weather impacting bauxite availability. Prices held above $390 per tonne, but traders questioned the fundamentals behind the rally. The Super El Niño weather event and increased smelter consumption in Indonesia contributed to the price movement. Despite rising consumption, some argued that the fundamentals did not justify the price increases.