LME base metals prices remain stable d-o-d

• Copper smelter margins weaken as sulphuric acid prices decline
  
  
• US aluminium costs surge sharply amid supply constraints
  
  

Base metals on the London Metal Exchange (LME) showed a stable trend on 4 May 2026, with prices holding stable across major commodities. Aluminium remained unchanged at $3,522/t, while copper held firm at $12,997/t. Similarly, nickel stood flat at $19,365/t, zinc at $3,345/t, and lead at $1,949/t, indicating no significant price movement across the complex on a day-on-day basis.

On the inventory front, LME stocks also showed a stable trend, with no changes reported across key metals. Aluminium stocks were steady at 367,050 t, copper at 399,725 t, nickel at 277,398 t, zinc at 98,650 t, and lead at 269,575 t, suggesting balanced supply-demand conditions in the near term.

Domestic market overview

India's non-ferrous scrap prices showed a mixed trend d-o-d, with stability in aluminium and a slight decline in copper. In the aluminium segment, aluminium tense scrap (loose), ex-Delhi, remained unchanged at INR 295,000/t, while ex-Chennai prices were stable at INR 308,500/t, reflecting a flat trend across key regional markets.

In the copper segment, copper armature scrap (Cu 99%), ex-Delhi, declined to INR 1,144,000/t from INR 1,145,000/t, marking a drop of INR 1,000/t d-o-d, indicating slightly weaker spot sentiment and cautious buying interest.

Other updates

Oil prices edge lower amid ongoing Gulf tensions

US crude futures declined by over 1% in early Asian trade on 5 May, as market participants assessed ongoing supply risks linked to geopolitical tensions in the Strait of Hormuz and a fire at a UAE oil facility.

WTI crude was reported at $105.36/bbl, down $1.06 (-1%), following a strong rally of over 4% in the previous session, indicating profit-booking alongside continued uncertainty in supply outlook.

Despite the correction, the market remains highly sensitive to Middle East disruptions, with traders closely monitoring shipping risks and potential supply tightness, keeping overall price levels elevated.

Copper smelter margins under pressure

Copper smelters are facing rising margin pressure as sulphuric acid prices soften, eroding a key by-product revenue stream that had offset negative treatment and refining charges (TC/RCs). With spot TC/RCs remaining negative due to tight concentrate supply, smelters had relied on acid sales-where 1 tonne of copper yields around 3-4 tonnes of acid-to sustain profitability.

However, weakening acid prices are now reducing this financial buffer, forcing smelters to reassess operations. The shift is expected to strengthen smelter bargaining power in upcoming benchmark negotiations, while also raising the risk of output cuts, which could tighten refined copper supply and lend support to prices.

US aluminium smelting costs soar

The cost of primary aluminium from US smelters has surged nearly 90% y-o-y, driven by a combination of tariffs, logistics premiums, and geopolitical disruptions impacting global supply chains.

With global aluminium prices around $3,500/t, the effective US price has risen to around $6,100/t, compared to $3,220/t a year earlier, highlighting the impact of import duties and delivery-related costs on domestic pricing.

The sharp increase reflects structural challenges in the US aluminium sector, including high energy costs, limited smelting capacity, and reliance on imports, keeping domestic premiums elevated.

Red mud gains traction as a strategic resource

Red mud, a by-product of alumina refining, is increasingly being repositioned as a strategic secondary resource, driven by resource efficiency, carbon compliance, and supply security. With global alumina output exceeding 150 mnt, annual red mud generation has crossed 175 mnt, with stockpiles at around 4 billion tonnes (bnt), making it a significant untapped resource.

The residue contains iron, alumina, titanium, and critical minerals like scandium and rare earths, supporting circular economy and recovery initiatives.The shift highlights growing focus on secondary resources and low-carbon inputs, with potential implications for long-term aluminium supply dynamics.