LME Metals Rebound as Dollar Retreats With Copper Near $14,400 and Escondida Strike Risk in Focus
Base metals whipsawed in the first week of October: a dollar squeeze pushed aluminium to a twelve-week low on 1 October, then softer US payroll data sent the whole complex higher on 5 October with three-month copper closing at 14,401 dollars a tonne and Escondida strike risk adding a supply premium.
On 1 October the complex sold off as the dollar marked its strongest level since April 2025 and Treasury yields hit multi-decade highs. Benchmark three-month aluminium on the London Metal Exchange fell 1.7% to 3,115 dollars a tonne after touching its lowest since 7 July, while copper dropped 1.1% to 14,253.50 dollars after hitting its weakest since 17 September. Zinc lost 2.7% to 3,727 dollars, nickel dipped 2.1% to 15,595 dollars and lead eased 0.8% to 1,858 dollars, with only tin higher at 53,920 dollars.
Aluminium fundamentals have softened alongside the macro move. The metal is down roughly 18% from the four-year high it set in June as worries about Gulf-region supply eased and new Indonesian capacity came into view. Macquarie cut its forecast for this year's global aluminium deficit to 820,000 tonnes from 940,000 tonnes as Middle East restarts progressed faster than expected, with Emirates Global Aluminium having brought a quarter of its Al Taweelah smelter in Abu Dhabi back online after March damage. Macquarie still sees a 410,000 tonne surplus in 2027 and forecasts an average price of 3,050 dollars next year against 3,325 dollars this year.
Copper's supply side is doing the opposite. Supervisors at BHP's Escondida, the world's largest copper mine, rejected the company's final collective bargaining offer and authorised strike action, triggering mandatory government mediation after a fatal maintenance accident. The vote adds to Chilean output weakness at a time when Chinese exchange stocks were already low and the Shanghai Futures Exchange was closed for the National Day holiday until 8 October.
The complex then reversed. LME closing prices show three-month copper at 14,401 dollars a tonne on 5 October, up 134.50 dollars or 0.94% on the day, with aluminium at 3,121 dollars, zinc at 3,740.50 dollars, nickel at 15,645 dollars, lead at 1,869.50 dollars and tin at 54,390 dollars all higher. Weaker-than-expected US September payroll data cut rate-hike expectations and pulled the dollar off its highs, giving dollar-denominated metals a valuation-repair window while Chinese participants remained off the market.