- China’s low inventories continue supporting copper spot premiums
- Vedanta aluminium output rises 5% to 0.63 mnt
Base metals on the London Metal Exchange (LME) traded mostly higher on 3 July 2026, with zinc leading gains among major non-ferrous metals. Zinc rose 1.55% d-o-d to $3,541/t, followed by nickel, which increased 1.07% to $16,424/t. Lead and copper also gained 0.85% and 0.31% to $1,892/t and $13,367/t, respectively, while aluminium edged marginally lower by 0.03% to $3,091/t. The gains were supported by continued tightening in LME inventories, particularly for copper, while improving risk appetite also lent support to industrial metals.
On the inventory side, trends remained mixed. Copper inventories recorded the largest decline, falling 0.77% d-o-d to 322,350 t, followed by aluminium and lead stocks, which dropped 0.50% and 0.49% to 300,275 t and 294,450 t, respectively. Zinc inventories also declined 0.21% to 118,950 t, while nickel inventories increased 0.14% to 274,620 t.
Domestic market overview
India’s non-ferrous scrap market remained largely steady on 3 July. Aluminium tense scrap (loose), ex-Delhi, remained unchanged at INR 272,000/t, while ex-Chennai prices were also steady at INR 265,000/t.
Meanwhile, copper armature scrap (Cu 99%), ex-Delhi, increased by INR 3,000/t, or 0.25% d-o-d, to INR 1,203,000/t, supported by firmer LME copper prices and continued tightness in exchange inventories.
Oil eases as OPEC+ output hike reinforces oversupply outlook
Global crude oil prices edged lower on 6 July 2026, with WTI crude declining 0.48% d-o-d to $68.72/bbl and Brent crude slipping 0.43% to $71.96/bbl. Natural gas fell 1.55% to $3.18/MMBtu, while the US dollar index increased 0.20% to 100.97.
Market sentiment remained focused on improving global supply conditions after Organization of the Petroleum Exporting Countries (OPEC+) agreed to raise production targets by 188,000 barrels per day from August, extending its phased rollback of voluntary output cuts. Crude exports through the Strait of Hormuz have recovered significantly in recent weeks, with Saudi Arabia restoring exports to near pre-conflict levels and other Gulf producers also increasing shipments, reinforcing expectations of a better-supplied oil market.
Concerns over a potential global supply surplus continued to outweigh demand optimism. Analyst estimated OPEC production increased by 2.34 million bpd in June as exports resumed through the Strait of Hormuz, while weaker Chinese crude imports and higher Gulf exports further strengthened expectations that supply growth could outpace demand during the second half of the year. Although geopolitical risks persist, analysts noted that the rapid normalization of tanker traffic has removed much of the war-related risk premium from crude prices, keeping Brent near $72/bbl.
Other updates
Low inventories support China’s copper spot market
China’s copper spot market remained resilient during H1 2026, supported by persistently low domestic inventories despite volatile demand. After weakening in Q1 due to post-holiday inventory buildup and slow downstream recovery, spot premiums rebounded in Q2 as inventories declined, particularly in Guangdong, where tighter supply created arbitrage opportunities with East China.
From May to June, the widening CME-LME price spread diverted overseas copper shipments to the US, limiting imported copper arrivals into China and supporting the spot market despite high copper prices and seasonal demand weakness. Looking ahead, low inventories and constrained imports are expected to continue underpinning the market in Q3, while new copper cathode capacity additions in H2 2026 could gradually ease supply tightness and cap further gains.
Vedanta Aluminium reports record quarterly production
Vedanta Aluminium recorded its highest-ever quarterly aluminium production of 0.63 mnt in Q1 FY27, marking a 5% y-o-y increase, driven by higher output from its new smelting capacity and continued operational efficiency gains. Alumina production also rose 9% y-o-y to 587,000 t, supported by improved refinery performance and higher operating efficiencies. As Vedanta continues to strengthen its production base while progressing with its long-term plan to expand aluminium capacity to 6 million tonnes per annum (mtpa), reinforcing its position among the world’s leading aluminium producers.
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