LME base metals trade mixed; tightening supply, geopolitical shocks steer markets

Japan is evaluating an additional release of around 20 days' worth of oil reserves, as uncertainty persists over the reopening of the Strait of Hormuz despite the ceasefire. The country has already made available around 50 days of supply through earlier coordinated and unilateral releases while maintaining around 230 days of reserves.

With around 95% dependence on Middle East oil, ongoing supply disruptions have forced refiners to cut utilisation to around 67.7%, highlighting continued stress in energy flows. The proposed release aims to stabilise domestic supply and mitigate ongoing logistical bottlenecks in the global energy market.

Iran's Hormuz "toll" proposal could structurally elevate global energy costs

Iran's proposal to impose transit fees on vessels passing through the Strait of Hormuz -- a route handling near 20% of global oil and gas flows -- signals a potential structural shift in energy markets. Reports indicate charges could reach up to $2 mn per vessel, effectively turning the chokepoint into a controlled "toll corridor".

The move is expected to raise freight, insurance, and compliance costs while introducing geopolitical selectivity in shipping access. Despite opposition from global stakeholders citing free navigation principles, Iran's growing control over transit flows could embed higher risk premiums and sustain elevated global energy prices.

China's copper import slump signals shift in global market dynamics

China's refined copper imports declined sharply, with February volumes falling to 125,350 t, the lowest since 2011, reflecting reduced willingness to absorb metal at elevated global prices. Imports during January-Febuary 2026 dropped around 25% y-o-y, indicating weakening reliance on overseas refined copper.

At the same time, exports surged to near 172,000 t (vs around 49,000 t in the year-ago period), supported by rising domestic smelting capacity and increased availability of copper concentrates and recycled feedstock.

Elevated inventories, with SHFE stocks peaking at around 433,500 t, further highlight subdued near-term demand, suggesting China's growing ability to influence global copper flows and pricing dynamics.

Rusal to reroute aluminium flows to Japan amid Iran-led supply disruptions

Russia's Rusal is planning to redirect aluminium shipments from China to Japan and other Asian markets, as the Iran conflict disrupts Gulf supply chains and reshapes global trade flows. Japanese buyers have agreed to pay record premiums of around $350-353/t (11-year high), creating stronger arbitrage opportunities for producers.

The shift also reflects weak demand in China, where buyers are resisting premium-linked imports amid ample domestic supply and rising inventories. As a result, Rusal is increasingly targeting Japan and South Korea, highlighting a broader realignment in regional aluminium trade and pricing dynamics.

Oil prices rebound as supply risks persist despite ceasefire

Crude oil prices rebounded sharply, with Brent rising to around $97.22/bbl and WTI to around $97.52/bbl, recovering from the previous session's decline amid continued concerns over Middle East supply stability despite the Iran ceasefire.

Market sentiment remains cautious, with uncertainty around ceasefire durability and ongoing restrictions in the Strait of Hormuz, which handles around 20% of global oil flows, limiting confidence in a full normalisation of supply chains.

As a result, geopolitical risks and logistical disruptions continue to underpin oil prices, keeping energy markets volatile despite near-term easing.