LME base metals show divergent trends; falling inventories support prices

• Zinc leads LME gains as inventories continue to tighten
  
  
• Egypt's new smelter project signals expansion in global aluminium capacity
  
  

Base metals on the London Metal Exchange (LME) showed a mixed trend as of close on 7 May 2026, with gains in zinc, lead, and copper offset by declines in aluminium and nickel. Zinc emerged as the top gainer, rising 1.75% to $3,459/t, followed by lead, which increased 0.23% to $1,982/t, while copper edged marginally higher by 0.01% to $13,393/t. Meanwhile, aluminium declined 0.84% to $3,493/t and nickel fell 0.29% to $19,143/t, reflecting selective weakness across the base metals complex.

On the inventory side, LME stocks remained under pressure. Zinc inventories recorded the steepest decline, falling 1.51% to 94,800 t, followed by aluminium inventories, which dropped 0.69% to 360,225 t, indicating continued drawdown in available stocks. Lead inventories also decreased by 0.78% to 266,400 t, while copper stocks eased 0.24% to 397,725 t. Nickel inventories remained largely stable, edging marginally lower by 0.01% to 276,864 t, suggesting balanced near-term supply conditions across most metals.

Domestic market overview

India's non-ferrous scrap prices showed a firm trend on a d-o-d basis, with both aluminium and copper scrap prices moving higher across key domestic markets. In the aluminium segment, aluminium tense scrap (loose), ex-Delhi, increased by INR 3,000/t, or 1%, d-o-d to INR 298,000/t, while ex-Chennai prices rose by INR 1,500/t, or 0.5%, to INR 310,000/t, reflecting improved market sentiment.

In the copper segment, copper armature scrap (Cu 99%), ex-Delhi, increased by INR 9,000/t, or 0.8%, d-o-d to INR 1,155,000/t from INR 1,146,000/t, indicating stronger buying activity and firm domestic demand conditions.

Other updates

Trafigura plans new aluminium smelter project in Egypt

Global commodities trader Trafigura has signed a term sheet with Egyptalum and Metallurgical Industries Holding Company (MIH) to develop a new primary aluminium smelter at Egyptalum's Nag Hammadi complex in Egypt. The proposed project includes a 300,000-t/year aluminium smelter and a 150,000-t/year anode plant, with total investments estimated at $750-900 million.

The project is expected to nearly double Egyptalum's existing primary aluminium production capacity. Under the agreement, Trafigura will act as a minority equity investor, debt financing partner, and long-term feedstock supplier and offtake partner for the project.

The development is expected to strengthen regional aluminium supply availability and enhance Egypt's role in the global aluminium trade flow over the medium term.

Asia receives first Mexican fuel oil cargo amid Middle East disruptions

Asia received its first Mexican fuel oil cargo in nearly nine months as buyers sought alternative supplies following disruptions in Middle East trade flows. The shift highlights tightening global HSFO availability and changing trade dynamics amid ongoing geopolitical tensions.

The development may provide limited near-term relief to Asian fuel oil supply, although elevated freight costs and constrained availability are expected to keep market sentiment firm.

Middle East tensions escalate after renewed US-Iran clashes

Fresh exchanges between US and Iranian forces in the Strait of Hormuz have heightened concerns over regional stability and global energy trade flows. The renewed conflict has weakened hopes of a lasting ceasefire, while raising fears of further disruptions to one of the worlds most critical oil shipping routes.

The escalation has supported crude oil prices and added volatility across global commodity markets, as traders continue to monitor shipping activity, geopolitical developments, and potential supply disruptions in the Gulf region.