Commodity markets saw a boost as a weaker US dollar increased investor appetite, according to ANZ analysts. However, gains remain tempered by ongoing uncertainty surrounding overall demand. Market risk appetite improved amid growing confidence that the US government shutdown would soon conclude, further buoying the sector.
Base metals led the charge, with aluminium and copper experiencing significant gains. Aluminium in Shanghai reached its highest level in nearly a year, propelled by robust demand from China’s renewable energy sector. Investment in Chinese renewables rose 11 per cent year-on-year in the first half of 2025.
Copper prices also found support from concerns over potential trade flow distortions arising from US tariff changes implemented under the Trump administration. The premium on US to LME copper has climbed back to approximately $US1000 a tonne, fuelled by expectations that the Commerce Department will decide next year on phased tariffs of 15 per cent, increasing to 30 per cent, on refined copper.
Iron ore futures experienced a downturn as progress at Guinea’s Simandou mine heightened focus on increasing supply. ANZ reported that the Simandou project is anticipated to eventually export up to 120 million tonnes annually, placing medium-term pressure on iron ore prices once production commences in early 2026. Losses were partially offset by expectations of seasonal demand in China, where steel mill maintenance shutdowns have been less extensive than typically observed, maintaining stable hot metal output.
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