Copper and aluminium climb as weak dollar extends metals rally

29/01/2026 05:48 AST

Copper moved higher on Wednesday while aluminium and zinc notched multi-year highs as the US dollar slid to a four-year low and investors continued to pile in with bullish bets on industrial metals.

Benchmark three-month copper on the London Metal Exchange was up 0.9 percent to $13,124 a tonne by 1:20 p.m. Saudi time. Aluminium was up 1.8 percent at $3,265, touching its highest since April 2022 and zinc was up 1.9 percent at $3,416 after hitting its highest since January 2023.

The dollar index hit its lowest since February 2022 on Tuesday after US President Donald Trump said the value of the greenback was "great." A weaker US currency makes dollar-denominated metals more affordable for those holding other currencies and can boost demand.

Analysts at brokerage Sucden Financial said on a webinar on Wednesday that the rally in base metals was being driven by macro positioning rather than fundamentals.

"It's inevitable that copper prices are going to shoot upwards. What we've been seeing with the specs (speculative investors) in gold and silver, they're all piling into the base metals, too," Sucden's Robert Montefusco said.

The cash LME copper contract was trading at a $90 a tonne discount to the three-month forward CMCU0-3, suggesting little need for near-term metal.

"We have seen a huge unwinding in spreads, flipping into contango," said Sucden's head of research, Daria Efanova, noting that Chinese companies were offloading material into LME warehouses ahead of the Lunar New Year holiday in February.

A contango market structure is when the spot price is lower than the forward price.

Aluminium's jump came after Goldman Sachs raised its first-half average price forecast to $3,150 a tonne, from $2,575, citing low inventories, doubts over power availability for new smelters in Indonesia and robust global demand growth from electric vehicle producers and power grids.

Elsewhere, lead added 0.5 percent to $2,030.50 a tonne, nickel gained 2.1 percent to $18,550 and tin climbed 1 percent to $55,205 after touching a record $58,340 on Tuesday.

Reuters