Industrial metals extended gains in yesterday’s trading, with LME Copper approaching the $11,000/t level amid a weakening US dollar. Expectations that the Federal Reserve will cut interest rates at its December meeting are growing once again. The market is pricing in a probability of more than 80% of a cut, up from around 30% a week ago, ING's commodity experts Ewa Manthey and Warren Patterson note.

Fed rate-cut bets boost industrial metals

"Supply-side dynamics added additional support to Copper. Chile's Codelco, the world’s largest Copper producer, is pushing for a sharp increase in annual premiums for refined Copper deliveries to Chinese customers. Market sources suggest offers of $335/t over LME prices for 2026 contracts, with some buyers reportedly quoted as high as $350/t during negotiations in Shanghai, Bloomberg reported."

"This represents a dramatic jump from the $89/t premium agreed for 2025, underscoring concerns of a potential shortage. Last week, Codelco offered a record $330/t premium to South Korean clients."

"Meanwhile, investor positioning reflects caution. According to the latest LME Commitments of Traders Report (COTR) for the week ending 21 November, net long positions in aluminium fell by 14,978 lots to 111,129 lots. This marks the least bullish position since early July. Copper saw net bullish bets decline by 10,500 lots to 64,853 lots, the lowest since late September. Zink positions were trimmed for a second consecutive week, down 2,774 lots to 28,638 lots, the weakest since mid-October."