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Copper rods scrap metal by Alexa via Pixabay
Copper rods scrap metal by Alexa via Pixabay

The base metals sector composite, consisting of the metals trading on the London Metals Exchange, declined in Q2. The composite consisting of LME copper, aluminum, nickel, lead, zinc, and tin prices fell by 1.69% in Q2 but was 4.45% higher over the first six months of 2025.

My Q1 Barchart article on the base metals sector concluded with:

Q2 began with a risk-off bang, sending metals prices substantially lower to levels that offer value. However, markets remain falling knives in early April, which requires caution. Chinese demand is critical for the path of least resistance of base metals prices when the current selling ends. I believe base metals will find higher lows and resume their upward trajectory over the coming weeks and months. 


After a volatile quarter caused by the Trump administration’s tariff policy, prices closed Q2 substantially higher than the early April lows. Copper exploded higher to a new record peak in early Q3 after President Trump announced a 50% tariff on the red metal.

The mixed quarter in the base metals sector caused three nonferrous metals to post gains in Q2, while three moved lower. LME copper, aluminum, and lead three-month forwards rallied, while nickel, zinc, and tin prices declined over the three months from the end of March 2025 through June 30, 2025.

U.S. tariffs caused volatility in the base metals arena, as they moved from LME warehouses to the U.S. in anticipation of trade barriers.

<i>Source: LME</i>
Source: LME

The chart shows substantial percentage decreases in copper, aluminum, zinc, and tin stocks at the LME in Q2 and over the first six months of 2025. While lead and nickel inventories rose, the potential for tariffs likely caused the metals to move out of LME warehouses.

<i>Source: </i><i>macromicro.me</i>
Source: macromicro.me

COMEX copper warehouse stocks moved 115,034 tons higher in Q2 2025. However, the combined LME and COMEX stock changes resulted in an overall 5,716-ton reduction in inventories in Q2 2025.

The overall inventory picture in Q2 and over the first six months of 2025 provides supportive underlying fundamentals for the base metals trading on the London Metals Exchange.

COMEX copper futures traded in a wide range in Q2, as the prospects for tariffs caused the futures to rise to a new record high, with the metal moving from LME to COMEX warehouses. The exclusion of copper from the trade barriers led to a price plunge.



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