Metal Market Weekly Update: September 29, 2025 – October 03, 2025

Quick Summary

The past week saw mixed dynamics: supply for several base metals tightened (in the case of copper, due to supply disruption factors), while global demand faced pressure from geopolitical risks—notably, the temporary US government shutdown, which increased expectations for a Fed rate cut and created an environment of uncertainty. As a result, prices for many base metals continued to maintain high levels compared to the beginning of the year, while scrap metal prices saw varied movements across regions and recycling sectors.

Price Summary Table (Key Weekly Influences)

Note: The price levels below are sourced from LME data (closing on Oct 2–3, 2025), SMM/Shanghai Metals data (China domestic prices & scrap), along with historical/spot data from Investing/TradingView/Westmetall; the figures represent reference prices at the stated time and may change during the trading session.

MetalKey Price Ranges (LME/SMM)Weekly Drivers
CopperLME cash / 3-month around $10,300–$10,480/t (~$10,455/t reported on Oct 2, 2025). COMEX/Investing data shows corresponding prices per pound around $4.95–$5.11/lb (recent session volatility).Supply risks (Grasberg disruption + others), strong demand from power/EV/data center sectors, and a weaker USD due to Fed rate cut expectations.
AluminiumLME cash/3-month around $2,680–$2,705/t (closed around $2,700/t). China domestic price (SMM A00 ingot) around $2,567/t (late Sept data).Tight scrap supply in China, supporting ingot/ingot prices. Production costs (energy/environmental levies) remain supportive.
ZincLME cash/3-month $3,000–$3,100/t (reported close around $3,021–$3,102/t depending on the day). SMM 1# zinc (East Asia) around $2,695–$2,708/t.Supported by galvanizing demand (auto & construction) + inventory factors. Focus on LME–SMM arbitrage and changing treatment charges (TC/conc) due to ore supply.
LeadLME cash around $1,950–$1,960/t (e.g., reported $1,957/t late Sept/early Oct). SMM domestic figures show similar levels when converted.Driven by lead recycling capacity, battery demand (EV/storage), and inventory levels.
Iron / SteelHighly regional market. SHFE rebar/HRC fluctuates in CNY/t. China domestic rebar (SMM/SHFE) around 3.0–3.2k CNY/t (e.g., rebar ~3.17–3.18k CNY/t depending on the day). HRC futures (international/US basis) around $800–$850/t.Strongly influenced by China’s property market policies. Steel scrap showed a short-term downward trend in the US/Northeast market (Fastmarkets Oct forecast) but with a lag in China depending on the construction cycle.

Detailed Metal Price Movements and Drivers

Copper

  • LME/COMEX: The rise in liquidity and open interest indicates fund inflow into futures contracts.
  • Copper Scrap: SMM & Fastmarkets regularly update scrap levels in China and internationally. China copper scrap (various grades) is trading strongly, and SMM’s scrap price trend shows a slight increase due to a shortage of Grade A recycled material. SMM publishes daily updates.

Reasons for Copper Price Movement This Week:

  1. Increase due to Supply Risks: Disruption at Grasberg + some interruptions in Africa/Indonesia/Chile, coupled with demand from the power/EV/data center sectors.
  2. Monetary Environment Support: Expectations of a Fed rate cut (leading to a weaker USD) helped support USD-denominated commodity prices.
  3. China Scrap Tightness: High-grade scrap is scarce in China, pushing the premium of scrap over refined metal. This increases input costs for smelters and puts pressure on scrap trading.

Aluminium

  • LME/SMM: Scrap supply pressure and production costs continue to be supportive factors for the price.
  • Aluminium Scrap: SMM A00 scrap/ingot and secondary reports indicate rising scrap volatility in China (e.g., weekly increases in many regions due to tight supply).
  • Weekly Highlight: Tightening aluminium scrap in China, coupled with changing energy and production costs (taxes/environmental costs), is forcing mills to pay higher prices for scrap; this supports the price of ingot. SMM reports on China’s aluminium industry’s full cost, indicating persistent pressure.

Zinc

  • Zinc is supported by galvanizing demand in the automotive & construction sectors + inventory factors. However, the focus is on the LME–SMM spread and changes in treatment charges (TC/conc) based on ore supply.

Lead

  • Lead recycling capacity, demand from the battery industry, and inventory are key determinants. Current prices reflect smelting and the demand for batteries in vehicles & energy storage.

Iron / Steel

  • Steel is heavily influenced by China’s domestic policies (property sector).
  • Iron/Steel Scrap: Fastmarkets and scrap-steel indices show a short-term downtrend in the US/Northeast market (Fastmarkets predicts a downtrend for October due to reduced mill demand). In China, steel scrap lags behind the construction cycle.
  • Key Factors: Protectionist policies (EU/US), the China property market, and steel and iron ore inventories are decisive factors. News of EU tariff/quota increases could boost domestic scrap demand within the bloc. US & Europe (Fastmarkets, SCRAP): Fastmarkets reports a forecast for lower US scrap prices in October due to weak rolling demand and high inventories at some mills; in Europe, protectionist policies may support domestic scrap demand (due to higher import costs). Overall, scrap is a highly localized market—key movements depend on steel production activity and trade policies.

Main Drivers This Week — Summary and Real-World Examples

1. Supply Disruption Factors (Impact on Copper and some Base Metals)

  • Major Mine Shutdown (e.g., Grasberg): The incident/disruption at the Grasberg mine (Indonesia) reduced output and tightened the copper market, contributing to higher-than-expected copper prices. A Reuters report estimated an impact of hundreds of thousands of tonnes, leading to tighter supply forecasts for 2025. This supply tightness, combined with energy transition/EV demand, led analysts to adjust break-even price forecasts.

2. Political & Policy Risk — US Government Shutdown (Dual Impact)

  • Short-term Result: The US government shutdown (starting early in the week) disrupted the release of key economic reports (e.g., monthly jobs report), leaving the market short of data for the Fed’s policy decisions. Financial markets reacted by increasing rate cut expectations (due to deflation/growth risks), prompting a shift of capital towards safe-haven or lower-interest-rate-sensitive assets; this helped solidify or support metal prices (especially base and precious metals) due to a weaker USD and lower capital cost expectations.
  • Dual Impact on Base Metals:
    • Supportive Impact (on Price): Rate cut expectations (CME FedWatch & analysis reports like BofA) lead to lower interest rates and a weaker USD—factors that typically support the price of USD-denominated commodities (lowering holding costs and encouraging investment in real assets).
    • Delayed/Eroding Impact (on Demand): If the shutdown is prolonged and reduces economic activity (less government spending, delayed projects), real demand for metals (construction, machinery, auto) could drop, putting downward pressure on prices in the medium term. Reuters and news agencies warned that a prolonged shutdown increases risks to growth and data for the Fed.

3. Trade & Protectionist Policies (EU, US) — Impact on Steel & Scrap

  • The EU is considering reducing quotas and increasing tariffs on steel imports—this news could support domestic EU steel prices and increase domestic scrap demand (as import costs rise), while creating a ripple effect on the European scrap supply chain. Reuters reported on plans to cut quotas and raise over-quota tariffs up to 50% (details released during the week). This could increase domestic scrap demand in the EU and support regional steel scrap prices.

4. China’s Role (SMM) — Demand & Scrap Factors

  • China remains a major determinant of global price movements: SMM noted that domestic prices (copper cathode, aluminium A00, zinc 1#) fluctuated but are generally at supportive levels given changes in inventory and refining. The shortage of Grade A aluminium scrap in China is pressuring aluminium & scrap prices. SMM is a daily data source showing scrap supply-procurement pressure.

Assessment of the “US Government Shutdown” Impact on Metal & Scrap Prices

Short-Term (Week – 1 Month)

  • Increased Volatility & Support for Low-Risk Assets/Commodities: Immediately, the shutdown created uncertainty regarding economic data (jobs, CPI, etc.)—leading the market to believe more strongly in the possibility of an earlier Fed rate cut (market models & Reuters/BofA/CME FedWatch reflect high probability for a cut in upcoming meetings). Result: The USD is temporarily weaker—a factor that typically supports USD-denominated commodity prices (copper, aluminium, zinc, lead). Therefore, this week saw many metal prices hold firm or rise slightly.
  • Expectational & Speculative Capital: Fund inflow into futures contracts (increased open interest in copper futures) suggests investors are betting on a higher price scenario in the short term—however, this may be more of a psychological reaction than a change in real demand.

Medium-Term (Several Months)

  • If the Shutdown is Prolonged: A greater negative impact may emerge—reduced real demand from infrastructure projects, public procurement, and delayed permitting; this would weaken industrial metal demand (steel, copper, aluminium) and could reverse the initial upward pressure. The market will heavily weigh the question: can monetary support (rate cuts) compensate for the demand shock? Many analysts warn of risks to growth if the shutdown persists.

Strategic Outlook — for Producers, Traders, and Scrap Recyclers

Producers & Smelters:

  • If you are a smelter/aluminium producer: Closely monitor A-grade scrap sources (for aluminium), and consider hedging a portion of output as base metal prices (LME) still face upside risk due to supply disruptions (copper) and policy volatility.

Traders & Commodity Funds:

  • Short-term capital may continue to push prices higher amid the potential for a Fed cut; however, if real growth signals weaken (prolonged shutdown), long positions require strict risk management (stop-loss, reduced leverage).

Scrap Purchasers / Recyclers:

  • In China: May capitalize on the aluminium/copper scrap premium if they have stable supply sources. In the US/Europe: Need to monitor the final developments in the domestic steel market (Fastmarkets predicts an October scrap price decrease). Consider short-term (spot) contracts rather than long-term ones if the market remains highly volatile.

Source: Compiled from internet sources