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Update as of October 28 – Industrial Metals Trends – November 2025
The month ended with a wave of optimism in the non-ferrous metals markets, where nearly all major prices posted significant gains. Aluminum and zinc remained the dominant performers during the period, supported by a return to industrial demand and more constructive sentiment on global markets.
In dollar terms, zinc was the month’s best performer with an impressive +10.27%, closely followed by aluminum (+7.75%) and copper (+7.37%), both supported by the recovery in the manufacturing sector and optimism regarding energy demand. Tin (+4.83%) and lead (+1.53%) showed more modest gains, while nickel, still held back by uncertainties regarding Indonesian supply, advanced by a modest +0.60%.
In euros, the picture remains consistent: zinc continues to lead the way with a brisk +11.06%, while aluminum rises 8.52% and copper 8.13%, thanks in part to a more stable exchange rate that amplified the gains. Tin (+5.58%) and lead (+2.26%) also performed well, while nickel moved into positive territory with +1.31%.
Overall, the month confirms a return of confidence in industrial metals, fueled by expectations of a recovery in demand in the energy and automotive sectors. Aluminum, in particular, returns to shine after weeks of weakness, while copper and zinc are poised to close the quarter with their best results since the beginning of the year.
Industrial Metals Cash Performance $/ton
Industrial Metals Cash Performance €/ton Bloomberg
Zinc: Amid Oversupply, Recovering Exports, and Inactive Premiums
The global zinc market enters the final quarter of 2025 with a new equilibrium, the result of a complex mix of factors: increased mine production, the gradual reopening of Chinese exports, and latent tensions on international markets.
During the third quarter, global zinc concentrate production grew significantly, strengthening the negotiating position of Chinese smelters, which now have ample feedstock supplies.
The Chinese-Australian mining group MMG reported solid results: the Dugald River mine (Queensland) produced 48,132 tons of concentrate (+38% year-over-year), while the Rosebery mine (Tasmania) totaled 10,615 tons, down from the previous quarter but in line with expectations.
Overall, the two sites generated 58,747 tonnes, representing a 26% increase year-over-year, helping to expand the availability of raw material for Chinese refiners.
“Smelters have more options and more bargaining power. No one is rushing to secure material,” a Shanghai trader explained to Commodity Evolution.
Domestic Preference and Import Penalty
Chinese operators have shown a growing preference for domestic concentrates, partly due to the loss of import convenience caused by the depreciation of the yuan and the decline in arbitrage. More and more smelters are favoring materials with high precious metal content—such as silver and indium—which can guarantee higher recovery margins.
According to Commodity Evolution, the average arbitrage spread for imported zinc recorded a loss of $397.21/t in September, worsening from $253.81/t in August. Meanwhile, CIF China Treatment Charges (TCs) rose to $100-120/t, signaling a market back in balance after months of tension.
“With more material available and less pressure to secure feedstock, smelters have returned to a strong position,” confirmed a trader from Nanchang.
China: Exports Rebound After Months of Slumber
On the refined metal front, China surprised the global market with a sharp rebound in zinc exports.
In September, shipments jumped to 2,477 tonnes, up 696% month-on-month and 158% year-on-year. Total shipments for the first nine months of the year reached 15,602 tonnes, up 32.75% from 2024.
“The increase in September was moderate, but it marks a change in direction,” said a Shanghai trader. “More and more operators are monitoring the market and preparing trial shipments.”
The trend reflects the widening arbitrage window and the sharp rise in LME prices, driven by low inventories and record backwardation, which has encouraged smelters to once again look to foreign markets.
Declining Imports and Increasingly Favorable Arbitrage for Exports
China’s refined zinc imports, however, have fallen sharply: in September, they stood at 22,678 tonnes, down 11.6% from August and 57% from a year earlier.
In the January-September period, total imports reached 258,224 tonnes, down 19.27% year-on-year.
The wide price differential between the LME and SHFE continues to make exports more profitable than imports. As of October 22, LME zinc closed at $3,019.5/t, while the SHFE contract settled around 22,000 yuan ($3,087/t), maintaining a positive spread favoring exports.
“The market is slowly reopening the arbitrage window,” explained a trader. “With the current differential, exports are attractive again—but uncertainties remain over costs and trade policy.”
First Trial Shipments and Waiting on the International Market
As the end of October approaches, small batches of Chinese refined zinc have begun to be shipped to Asia and the Middle East.
These aren’t significant volumes yet, but rather pilot shipments—a few dozen to a few hundred tons—indicating a cautious reopening of trade.
“We’re desperately waiting for Chinese metal,” said a Singapore trader. “There are offers, but nothing concrete.”
The parallel with March 2022 is immediate: back then, China exported around 80,000 tons in just a few months, reducing global tensions. Today, many operators are hoping for a similar effect.
Record Backwardation at the LME and Short-Term Tension
The backwardation of zinc on the LME—the spread between the spot price and the three-month price—reached an all-time high of $338.74/t on October 22, signaling unprecedented tension in the near-term availability of physical metal.
However, according to Commodity Evolution, this is not a structural shortage but rather the result of financial speculation and tactical shifts of metal between warehouses. “It’s a logistical shortage, not a production one,” explained a European trader. “The metal is there, but it’s not in the right place.”
Premiums in Shanghai: Stability and Expectation
While the LME market remains tense, calm reigns in China. Premiums for SHG 99.995% zinc CIF Shanghai have remained unchanged at $110-$130/t, stable levels since June, amid reduced trading and weak demand.
Export arbitrage shows thin margins—around $10/t—insufficient to fuel a real trade flow.
In contrast, import arbitrage continues to deteriorate, with a loss of $499.97/t calculated on October 21, compared to $472.24/t the previous week.
“The opportunities are only there on paper,” admitted a Guangdong trader. “In practice, costs wipe out margins: it’s a survival market, not a profit market.”
China Zinc Premiums $/ton – Powered by Commodity Evolution
LME Zinc: Between Rebound and Consolidation, the Market Seeks a New Direction
After a year of sharp fluctuations and a strong recovery in the summer months, the zinc market enters the fourth quarter of 2025 with bated breath. Three-month LME prices, which had plunged below $2,600/t in April, have regained ground, surpassing the psychological threshold of $3,000/t in October—a level not seen since the beginning of the year.
This dynamic is the result of a dual balance: on the one hand, the abundance of mining concentrates, which keeps Treatment Charges (TCs) under control and limits the risk of structural shortages; on the other, evident tension in the refined metal market, exacerbated by the LME’s record backwardation and record-low inventories.
A Recovery That Consolidated Over the Summer Months After the long decline that began in January and culminated in the spring collapse, zinc reached a solid turning point between May and June, coinciding with strengthening industrial demand and the recovery of the energy sector.
Since then, the price curve has assumed a more regular bullish pattern: higher highs, increasingly higher lows, and a moving average acting as a dynamic support line.
Technical indicators show positive, albeit slowing, momentum. The MACD remains in neutral-bullish territory, a sign that buyers still retain control of the market, but without excessive speculation.
Fundamental Factors: China’s Impact and LME Inventories
From a fundamental perspective, the third quarter saw a sharp expansion in concentrate production, primarily driven by MMG’s Australian sites. This guaranteed Chinese smelters a steady flow of raw material, allowing them to negotiate more favorable TCs and maintain a strong position.
At the same time, Chinese refined zinc exports—after months of stagnation—have begun to recover. September saw an increase of nearly 700% compared to August, and the trend could continue in Q4 if the arbitrage window remains open.
The key issue, however, remains backwardation: the difference between the spot price and the three-month price has reached record levels, over $330/t, signaling a tense and unbalanced market in the short term. Analysts, however, believe this tension is more the result of speculative maneuvers and “warehouse games” than a true shortage of the metal.
LME Zinc – 3 month $/t – Powered by Commodity Evolution
Most Likely Scenario for Q4 2025: Entering the fourth quarter, the technical and fundamental picture suggests a period of bullish consolidation.
After repeatedly testing the $3,050-$3,080/t threshold, the market appears set to move within a channel between $2,950 and $3,150/t, with a moderately positive trend.
- Baseline target (central scenario): $3,050-$3,150/t.
Outlook: Stability with Margins of Strength. In short, Q4 2025 for zinc could be remembered as a transitional phase: less frenetic than previous months, but with the concrete possibility of closing the year above $3,000/t.
The market remains fragile, but no longer vulnerable.
Ample concentrate availability limits the risk of speculative surges, while growing interest in Chinese exports offers a new balance to global flows. In other words, zinc enters the final stretch of 2025 on more solid foundations, ready to defend—and perhaps improve—the ground it has regained.
3-Month CE Forecast on LME Zinc $/ton – Powered by Commodity Evolution
Zinc Forecast: The Commodity Evolution (CE) Forecast Model Indicates Stability, But with Upside Margins
Simulations from the Moving Block Bootstrap (MBB) model offer a cautious but constructive view of zinc price developments in the fourth quarter of 2025 and early 2026.
After the summer recovery, the median forecast (50% percentile) suggests a stabilization phase between $3,050 and $3,150/t, consistent with the consolidation dynamic observed in recent months. The model, which is based on an empirical recombination of historical returns without theoretical assumptions, highlights how the market is regaining equilibrium after a 2025 marked by strong volatility.
The higher-level scenarios, represented by the 75% percentile, however, suggest the possibility of a bullish extension to $3,350-$3,400/t by January 2026, in the event of prolonged LME backwardation or a stronger recovery in industrial demand. Conversely, the 25th percentile identifies the lower bound around $2,850/t, corresponding to a possible scenario of inventory normalization and easing arbitrage.
Overall, the MBB model’s forecast cone indicates a more stable but not risk-free market, with volatility still high but more evenly distributed between bullish and bearish scenarios.
In summary, zinc appears to be heading towards a year-end phase of controlled consolidation, with an increasing probability of prices remaining above $3,000/t and a window of opportunity for renewed upward momentum in the first quarter of 2026.
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