Metals on fire: What's driving the unstoppable rally in copper, aluminium, and zinc

Base metal prices have witnessed a remarkable rally over the past few weeks, with copper, aluminium, and zinc leading the charge across major global exchanges. Copper prices have surged past the psychological $10,000 mark on the London Metal Exchange (LME), while on India’s MCX platform, they are hovering near record highs. Similar bullish momentum is evident in top consumer China, reflecting a synchronised global upswing. Aluminium prices have climbed to three-year highs, breaching ₹264 per kg in India, and zinc prices are trading at multi-month highs overseas and record levels domestically.

This surge in base metal prices is not merely a speculative run; it is rooted in a complex interplay of supply constraints, robust demand, geopolitical tensions, and policy shifts.

Supply Disruptions: Copper production has been hit by a series of disruptions at major mines. Accidents at Chile’s El Teniente mine, protests in Peru, and a deadly mudslide at Indonesia’s Grasberg mine have collectively removed hundreds of thousands of tonnes from global supply.

Infrastructure and Green Energy Demand: Global infrastructure spending and the transition to renewable energy are fuelling demand for metals like copper and aluminium. Copper, essential for electrification, is in high demand for EVs, solar panels, and grid upgrades.