Base metals prices plunged to a three-month low after geopolitical tensions and growth concerns offset AI-driven demand and supply deficits.
Base metals prices have experienced extreme volatility in 2024, with the LMEX index surging to an all-time high in early June before collapsing to a three-month low weeks later. The selloff followed the breakdown of a U.S.-Iran ceasefire deal, amplifying concerns over global growth and rising interest rates.
The sector had been supported by structural supply deficits and massive infrastructure spending for AI-driven data centers. However, high energy prices and shifting monetary policy expectations have increasingly weighed on the bullish outlook, creating a tug-of-war between demand drivers and macroeconomic risks.
Market participants are reassessing positions as the metals complex navigates conflicting signals, with near-term sentiment leaning cautious amid broader economic uncertainty.