Analysis of LME Price Fluctuations (March 10-14, 2025)

During the period from March 10 to 14, 2025, the price fluctuations of major non-ferrous metals traded on the London Metal Exchange (LME) were influenced by several factors. To understand these price changes, it is essential to consider global economic indicators, conditions in key metal-producing countries, and shifts in supply and demand.

1. Global Economic Indicators and Monetary Policy

At the beginning of March, the U.S. Federal Reserve raised its benchmark interest rate by 0.25 percentage points, maintaining a tight monetary policy. This strengthened the U.S. dollar, putting downward pressure on non-ferrous metal prices. Additionally, the European Central Bank (ECB) also implemented a rate hike to curb inflation, raising concerns about economic slowdown in the Eurozone. These shifts in global monetary policy negatively impacted metal demand forecasts.

2. China’s Economic Trends

As the world’s largest consumer of non-ferrous metals, China’s economic trends have a direct impact on metal prices. The Purchasing Managers' Index (PMI) for China's manufacturing sector, released in early March, fell below expectations, indicating a slowdown in industrial activity. This raised concerns about declining metal demand, exerting downward pressure on prices. Furthermore, the Chinese government’s stricter real estate regulations and reduced infrastructure investments added additional constraints on metal demand.

3. Supply Conditions in Major Producing Countries

In key copper-producing countries like Chile and Peru, labor disputes and environmental regulations led to production disruptions. This heightened concerns about copper supply shortages, pushing prices upward. Meanwhile, Indonesia’s restrictions on nickel exports further intensified supply shortages, contributing to price increases. However, these supply-side issues were somewhat offset by concerns over slowing global demand.

4. Energy Prices and Production Costs

Early March saw rising global oil prices, increasing energy costs. This, in turn, drove up the production costs of non-ferrous metals, exerting upward pressure on prices. In particular, aluminum production is highly energy-intensive, making it especially sensitive to fluctuations in energy prices. As a result, the rise in energy costs acted as a price-driving factor for aluminum.

5. Investor Sentiment and Financial Market Trends

During mid-March, global stock markets experienced increased volatility, strengthening investors’ risk-averse sentiment. Consequently, a preference for safe-haven assets emerged, leading to capital outflows from the metal market. Institutional investors, such as hedge funds, adjusted their positions, further amplifying metal price fluctuations.

6. Inventory Levels and Logistics Issues

The inventory levels of non-ferrous metals in LME-registered warehouses reflect market supply and demand conditions. At the beginning of March, declining inventories for certain metals raised concerns about supply shortages, supporting price increases. However, improvements in global logistics networks and the stabilization of shipping costs helped ease supply chain bottlenecks, exerting downward pressure on prices.

The LME non-ferrous metal price fluctuations between March 10 and 14, 2025, were driven by a combination of global economic indicators, supply conditions in major producing countries, energy prices, and investor sentiment. In particular, changes in global monetary policies and concerns over China's economic slowdown exerted downward pressure on prices from the demand side. Conversely, supply disruptions in major producing countries and rising energy costs acted as price-supporting factors. The interplay of these opposing forces contributed to the overall volatility observed in LME non-ferrous metal prices during this period.