Aluminium Outpaces Copper as Stockpile Drops Signal Tight Supply
Aluminium prices continued their upward trajectory on Friday, buoyed by strong domestic demand in China and declining stockpiles across both the Shanghai Futures Exchange (SHFE) and London Metal Exchange (LME). Meanwhile, copper prices edged lower, pressured by waning optimism from the latest US-China trade negotiations and investor caution around potential tariff impositions.
Aluminium Gains Momentum on Tight Supply
The SHFE aluminium contract rose 0.7% to 20,490 yuan/ton, extending gains for a third consecutive session, as stock levels dwindled to the lowest since February 2024. Over in London, LME aluminium advanced 0.3% to $2,525.5/ton, its strongest showing among major metals.
“Aluminium has been performing rather strongly recently, as demand from the domestic market has been robust, and SHFE stocks have been declining,” noted a Hangzhou-based analyst.
Key Stockpile Data:
-
SHFE aluminium stockpiles: 118,165 tons (as of June 6) – lowest since Feb 2024
-
LME aluminium inventories: 355,600 tons (as of June 11) – lowest since Oct 2022
This decline reflects healthy downstream demand, especially from China’s construction, packaging, and automotive sectors, paired with supply constraints due to stricter energy policies in smelter-heavy regions.
Copper Faces Headwinds Despite Supply Flow Into US
In contrast, copper prices remained subdued, with LME copper falling 0.3% to $9,673.5/ton, and SHFE copper sliding 0.1% to 78,610 yuan/ton. On a weekly basis, both contracts posted minor declines, highlighting a narrow trading range amid uncertainty over US trade policy and tariff speculation.
Market Highlights:
-
COMEX-LME copper premium: $946/ton – indicates strong US demand or limited offshore supply
-
Copper traders are holding positions ahead of potential tariffs on Chinese copper, keeping the market supported but cautious.
While copper shipments to the US have increased, suggesting some underlying strength, the lack of decisive bullish momentum reflects investor nervousness over the macroeconomic outlook and commodity volatility.
Other Metals: Mixed Performance Reflects Broader Uncertainty
The metals complex showed divergent trends:
| Metal | SHFE Movement | LME Movement |
|---|---|---|
| Lead | +0.3% to ¥16,945 | -0.2% to $1,992.5 |
| Nickel | -0.4% to ¥120,030 | -0.1% to $15,135 |
| Zinc | -0.2% to ¥22,020 | — |
With ongoing geopolitical risks, shifting demand patterns, and tight supply dynamics, investors are juggling short-term catalysts with longer-term fundamentals, especially in the face of global interest rate policies and energy-linked production cuts.
Conclusion: Aluminium Maintains Bullish Bias, Copper Awaits Clarity
The divergence between aluminium and copper underscores the complex dynamics shaping the base metals market in mid-2025. While aluminium is clearly benefiting from tight inventories and solid demand, copper remains trapped in a range, awaiting more clarity on global trade policies and inflationary pressures.
As China’s manufacturing activity stabilizes and Western economies shift toward green infrastructure, both metals are likely to stay in focus for investors and policymakers alike.
