LME base metals prices rise; Middle East disruptions, falling inventories underpin prices

• Middle East tensions boost aluminium prices to multi-year highs
  
  
• BHP remains bullish on copper amid elevated global prices
  
  

Base metals on the London Metal Exchange (LME) traded higher d-o-d on 22 April 2026, with all major metals posting gains led by aluminium and copper, while lead remained largely stable. Aluminium recorded the sharpest rise of 1.59% to $3,614/t, followed closely by copper, which gained 1.53% to $13,433/t. Nickel advanced 1.30% to $18,462/t, while zinc moved up 0.80% to $3,470/t. Lead posted a marginal increase of 0.03% to $1,964/t.

On the inventory front, stock movements were largely on the downside, indicating tighter near-term supply conditions across most metals. Zinc inventories registered the steepest fall of 3.13% to 107,525 t, followed by aluminium, which declined 0.77% to 383,275 t. Lead stocks edged lower by 0.23% to 273,000 t, while nickel inventories slipped 0.15% to 278,166 t. In contrast, copper stocks rose marginally by 0.04% to 398,575 t, suggesting relatively steady availability compared to other base metals.

Domestic market overview

India's non-ferrous scrap prices rose d-o-d. Aluminium tense scrap (loose), ex-Delhi, increased by INR 3,500/t or 1.2% to INR 290,500/t from INR 287,000/t previously. Similarly, ex-Chennai prices moved higher by INR 2,000/t or 0.7% to INR 305,000/t against INR 303,000/t in the previous session. Additionally, copper armature scrap (Cu 99%), ex-Delhi, rose by INR 2,000/t or 0.2% to INR 1,132,000/t from INR 1,130,000/t earlier, indicating steady buying interest in the domestic market.

Other market updates

Aluminium faces supply shock amid Middle East disruption

Global aluminium markets are facing a major supply shock, with Mercuria calling the ongoing Middle East disruption a "black swan" event. The region accounts for nearly 7 million tonnes (mnt)/year of smelting capacity, or around 9% of global supply, making the impact significant.

LME aluminium prices recently touched a four-year high of $3,672/t, while Mercuria estimates the market could move into a 2-mnt deficit by end-2026 if disruptions persist, particularly through the Strait of Hormuz.

The US and Europe remain most exposed due to their reliance on Middle East metal imports, while tightening inventories and rising physical premiums continue to support bullish sentiment.

Gulf supply disruption pressures alumina market

The ongoing Gulf supply disruption has begun to ripple through the global alumina market, as reduced aluminium operations in the region redirect raw material cargoes into the seaborne market. Gulf smelters, heavily dependent on imported alumina, are facing tighter feedstock availability after infrastructure damage and shipping constraints, increasing the risk of further production curbs.

Benchmark alumina prices have remained under pressure near $300/t, sharply below the 2024 peak of above $800/t, amid oversupply from China and Indonesia. Reflecting the shifting balance, Macquarie raised its 2026 global alumina surplus forecast to 2.2 mnt, as Gulf-bound shipments are rerouted elsewhere.

China is emerging as the key beneficiary, absorbing displaced alumina volumes while expanding aluminium output. China's share of global aluminium production rose to a record 60.2% in March, reinforcing its dominance in the global supply chain as Gulf disruptions weigh on Western producers.

Oil tops $100/bbl as US-Iran deadlock extends Hormuz disruption

Crude oil prices strengthened sharply, with Brent crude rising above $100/bbl for the first time in over two weeks on Wednesday, as no progress was reported in US-Iran talks and supply risks intensified in the Strait of Hormuz. The geopolitical stand-off continued to support bullish sentiment across global energy markets.

Tensions escalated after Iran seized ships in the Strait of Hormuz, while the US maintained its naval blockade and intercepted Iranian tankers, raising concerns over disruptions in one of the worlds most critical crude transit routes. Traders remained focused on potential impacts to near-term seaborne supply flows.

Further support came from US trade data, where total exports of oil and petroleum products climbed to a record high, highlighting strong overseas demand amid tightening global supply conditions. Market volatility is expected to remain elevated until clearer diplomatic progress emerges.

BHP copper outlook backed by strong prices, demand growth

BHP's copper business continues to be a key growth driver, supported by elevated copper prices and structural demand from data centres, power grids, renewable energy and electric vehicles. Spot copper is currently trading near historic highs at around $6/lb, driven by tight near-term supply and a robust consumption outlook.

For FY'26 (1 July 2025-30 June 2026), BHP expects copper production to be in the upper half of its 1.9-2.0 mnt guidance range, with improved cost performance at major assets such as Escondida, where unit cash costs are projected at $1.20/lb, lower than earlier estimates.

However, the long-term outlook remains more balanced, with copper prices expected to moderate to around $3.80/lb from 2030, indicating that much of the current bullish sentiment may already be priced into valuations.