Base metal prices are shaped by global economic trends and industry-specific factors, with China's economic conditions playing a pivotal role. As the largest consumer and producer, China significantly influences global pricing dynamics.
The firm said the rapid growth in the solar sector, battery industry, and Chinese consumption have led to demand outstripping supply. But the sanctions will still reverberate through metals markets because of the LME's central position at the heart of the industry.
Its prices are used as a benchmark and referenced in a huge number of contracts around the world, and many buyers view the ability to deliver on the LME as essential. Going ahead, as the traditional demand drivers of industrial metals have stalled, the short-term price outlook remains under pressure. Though the new demand areas like the clean energy sector are on the cards, they are unlikely to boost prices in the immediate run.
Meanwhile, Russia is the second largest aluminium producer and a significant source of material to US markets. Slapping such a steep tariff is expected to end the US imports from Russia.
Since the metal is used to make everything from beer cans to airplane parts, the US authorities should search for potential alternate supply in the event of a tariff hike. This commodity has been sliding down from the peak of on March 22 to the bottom of in September.
