Financial analysts at ING have released a dual-market assessment highlighting contrasting pressures in key industrial metals, with copper facing headwinds from swelling inventories while aluminium prices surge past $4,000 per tonne due to geopolitical supply risks.
Copper markets are under significant pressure in early 2025 as global inventories reach multi-month highs. Data from the London Metal Exchange (LME) shows registered warehouse stocks increased by approximately 42% during the first quarter of 2025, reaching 178,150 tonnes—the highest level in over eighteen months. Similarly, inventories on the Shanghai Futures Exchange (SHFE) expanded by 31.8% to 112,300 tonnes. This accumulation reflects robust refined copper production, shifting seasonal demand patterns, and logistical improvements that have enhanced inventory movement between regions.
ING's commodity research team notes that such inventory expansions typically precede price adjustments. The analysis contextualizes this within a global economic environment of mixed manufacturing signals, with construction and infrastructure remaining primary consumers, though renewable energy project timelines have experienced adjustments. The bank emphasizes that while inventory levels are a crucial signal, they must be considered alongside production costs, currency fluctuations, and geopolitical developments affecting trade routes.
In stark contrast, aluminium markets are experiencing a dramatic surge, with the LME three-month contract breaching the critical $4,000 per tonne threshold—a high not seen in several years. ING attributes this surge directly to a heightened geopolitical risk premium, compounded by supply-side constraints in major producing regions and ongoing energy market volatility. Aluminium production is extremely energy-intensive, and unstable natural gas and coal prices have forced smelters, particularly in Europe, to curtail output.
The concentration of the global aluminium supply chain in a handful of countries creates inherent vulnerability. Any disruption in these regions, currently heightened by geopolitical tensions, has an outsized effect on global availability. ING analysts state that geopolitical headlines are now a dominant market factor, triggering powerful price movements that indicate a shift in market psychology and risk assessment.
The downstream impacts are significant. The automotive, construction, packaging, and aerospace sectors face immediate challenges from higher input costs. Manufacturers must choose between absorbing costs to protect margins or passing them on to consumers. The near-term outlook for both metals remains uncertain: copper prices face downward pressure from inventories, while aluminium's path is tied to geopolitical developments. A de-escalation of tensions could quickly remove aluminium's risk premium, whereas further inventory builds could extend pressure on copper.
