The global metals complex — especially base metals like aluminium and copper — is firing on multiple cylinders. Supply disruptions, renewed demand hopes (especially from China and clean-energy investment), and expectations of a weaker US dollar are all helping to send prices higher. Domestic demand in India is holding firm too, while precious metals are seeing a mixed impact from this backdrop of strength and retracement. In this piece we unpack the drivers, what’s happening in India, and how investors should view the metals space going forward.

One of the strongest drivers behind higher metal prices is supply disruption. For example, the market for copper is under increasing strain:

• Research firm BMI recently raised its 2025 average copper price forecast to US $9,650 per tonne, up from US $9,500 previously, citing resilient demand and production bottlenecks.
• Multiple large mines face outages or production shortfalls — for example, Indonesia’s Grasberg mine suffered a mud-flow disaster curbing future output.
• On the aluminium side, warehouse inventories are falling sharply — warrants (metal available for delivery) on the Shanghai Futures Exchange declined nearly 6% in a week to October 22.

When supply is constrained but demand remains firm, prices tend to climb — a pattern seen across copper, aluminium, zinc, and nickel.

Even though global economic growth is moderate, select sectors are keeping demand buoyant:

• China remains the biggest copper consumer. Its inventories dropped from ~160,000 tonnes in March to just 26,000 tonnes by September 2025.
• Clean-energy infrastructure, electric vehicles, and power-grid upgrades are heavily copper-intensive, while aluminium finds use in solar frames, packaging, and transport.
• Power shortages in South Africa and smelter issues elsewhere are further restricting output, giving prices a lift.

In short, demand hasn’t collapsed — in fact, it’s improving in structural sectors tied to electrification and decarbonisation.

Metals are dollar-priced assets, so a softening greenback makes them cheaper for non-U.S. buyers and typically lifts demand. Investors now expect that the U.S. Federal Reserve could begin cutting rates in early 2026, weakening the dollar further. Lower interest rates also reduce the opportunity cost of holding non-yielding commodities like metals, creating additional tailwinds.

India’s metals story has its own strengths:

• Government infrastructure spending and the production-linked incentive (PLI) schemes are keeping end-use demand steady.
• Automotive and construction sectors remain large consumers of steel, aluminium, and copper.
• Local prices follow global cues; aluminium futures internationally rose nearly 8% in the past month, a trend mirrored on Indian exchanges.

Domestic producers such as Hindalco, Vedanta, and Hindustan Copper thus gain pricing leverage when international benchmarks climb.

While base metals surge, gold and silver are seeing mild pullbacks. Investors are rotating into industrial metals that benefit directly from the energy transition. Nonetheless, precious metals continue to play a vital role as hedges against inflation and geopolitical shocks — making short-term corrections opportunities for portfolio rebalancing rather than exits.

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Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Registered Investment Adviser, highlights that the metals rally is being powered by both cyclical and structural factors — limited supply growth, stable demand, and a softening dollar. However, volatility is inevitable. Investors should prefer low-debt producers with integrated operations and export exposure, while traders can look for tactical opportunities in futures and options.

Discover more commodity insights and advisory perspectives at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.