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LMEWEEK - Trafigura CEO minimizes AI and defence role in copper demand
The CEO of the trading house Trafigura stated on Monday that traditional applications of copper will continue as the largest part of the demand for the metal in the coming decade. This is not data centres or the defence industry. Richard Holtum, speaking at the LME Week in London, noted that artificial intelligence (AI), defence spending and metal demand are "buzzwords". He said that consumer demand will "dwarf three times" the AI demand for copper this year. Holtum, in a conversation with Matt Chamberlain, CEO of the London Metal Exchange said: "The amount that copper goes into air conditioning is more than what copper will go into data centers this year." Holtum stated that 90% of the copper demand we will see in the coming 10 years is from traditional sources such as infrastructure, construction, urbanisation and consumer goods. CRU, a consultancy, expects the copper demand in data centres to increase from 78,000 tonnes in 2020 to 260,000 tons this coming year. Holtum stated that although the new applications will add significant demand to the airwaves, "the amount that AI and defence gets in relation to the actual demand" is slightly disproportional. A spokesperson for Trafigura said that the company estimates AI copper demand to grow by 70,000 tons per year in 2025, while consumer durables, which are mainly shipped to emerging markets, will increase demand by 250,000 tons. Trafigura predicts that AI is expected to add one million tons of demand for copper over the next decade. (Reporting and additional reporting by Eric Onstad, editing by William Maclean & Tomaszjanowski).
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On the back of trade fears and rate cuts optimism, gold and silver are at all-time highs.
Gold reached a new record high on Monday as investors flocked to safe-haven investments amid renewed U.S. China trade tensions and the expectation of U.S. rate cuts. Silver's rise mirrored that of gold, reaching a new high. As of 10:04 am, spot gold had risen 1.9%, to $4,093.39 an ounce. After hitting a new record of $4,096.35/oz. U.S. Gold Futures for December Delivery surged 2.8%, to $4113.40. Prices are rising due to concern over the state of the world Gold and silver prices rise when investors become concerned about the economic or political state of the world. Jeffrey Christian, managing director of CPM Group said that the expectation of U.S. rate cuts is also driving prices up. Donald Trump, on the geopolitical side, reignited tensions between China and the United States last Friday, breaking a tense truce that existed between the two world's largest economies. The traders are now pricing in 97% of the probability that the Federal Reserve will cut rates by 25 basis points in October, and 100% for December. Gold is a non-yielding investment that tends to perform well in low interest rate environments. The price of gold has increased 56% in the past year. It reached the $4,000/oz mark for the first week last week. This was boosted by geopolitical uncertainties and economic uncertainty, as well as expectations that the U.S. will cut interest rates and the robust central bank purchases. Standard Chartered's forecast for next year is $4,488/oz, up from the average of $4,488/oz that Bank of America, Societe Generale and Bank of America have previously predicted. Standard Chartered Bank's global head of commodities research, Suki Cooper said: "Given that there has been a carousel in drivers and the short-lived dips, we believe this rally is still going strong, but a correction near-term would be better for a long-term uptrend." Spot silver increased 3.3% to $51.91/oz. It had reached a record of $52/oz in an earlier session. This was boosted by the same factors that supported gold and tightening spot markets. Goldman Sachs stated on Sunday that it expects the silver price to continue rising in the medium-term, due to private investment flows. However, they warned of increased volatility near-term. Technical indicators indicate that both gold and silver are overbought. The relative strength index (RSI), which measures the relative strength of a metal, is 80 for gold. Palladium rose 4.3%, to $1.465.97, while platinum gained 4%, to $1.651.20. (Reporting from Sherin Elizabeth Varighese and Pablo Sinha in Bengaluru, with additional reporting by Kavya Baliaraman. Editing by Joe Bavier.)
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Israel's Katz: Hamas failing to deliver four hostages dead would be a 'failure of commitments'
Israel Katz, Israel's Minister of Defence, said Monday that the announcement by Hamas militants to deliver four Israeli hostages dead is "a failure to meet commitments". Katz stated in a blog post on X that "any delay or deliberate avoidance of payment will be considered a grave violation of the contract and we will respond accordingly." According to the agreement, within 72 hours after the military redeployment all 48 hostages must be freed from the Gaza Strip. This includes 20 known alive and 28 dead. Hamas has previously stated that the recovery of bodies from some hostages could take longer because not all burial locations are known. (Reporting and editing by Menna al-Din, Jaidaa taha, and Alison Williams).
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OPEC predicts a smaller oil deficit in 2026 as OPEC+ pumps out more
OPEC's report on Monday showed that the world oil supply will closely match demand in 2020 as OPEC+ increases its production. This is a significant change from last months outlook which predicted a shortage of supply by 2026. OPEC+ has added more crude oil to the market, after the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies decided to unwind certain output cuts faster than originally planned. This additional supply has led to concerns about a surplus, and weighed down on oil prices in this year. In its monthly report, OPEC stated that the global economy is continuing to grow at a solid rate. It also maintained its forecasts of 1.3 million barrels of oil per day for this year and a slightly higher rate in 2026. "The robust economic dynamics in the third-quarter of 2025, combined with upward revisions in second-quarter growth in 2025 in the U.S., Japan, and India, as well strong data from China and India, reinforce a steady global growth outlook," OPEC stated. OPEC DEMAND PREDICTIONS EXCEED INDUSTRY OPEC's forecasts of demand are higher than industry estimates because it anticipates a slower transition to energy than other forecasters such as the International Energy Agency. OPEC's forecast also indicated a deficit in supply in 2026 in contrast with the IEA, and many analysts. A large deficit makes it easier for OPEC+'s plan to pump additional barrels in order to regain market shares. The Monday report revealed that the gap between OPEC's forecast and those of other analysts is closing. In its report, OPEC stated that OPEC+ increased crude production by 630,000 barrels a day in September to 43,05 million bpd. This was in line with its previous decisions to increase its output quotas. The report states that the demand for OPEC+ oil is expected to be 43.1 million bpd by 2026. If the group continues to pump at the rate of September, the global market will experience a 50,000 bpd deficit. The report from last month suggested that OPEC+ would have a 700,000 bpd deficit in 2026 if they continued to pump at the rate of August. Oil traded slightly above $63 per barrel on Monday after falling to a 5-month low last weekend, partly due to fears about a glut. Oversupply LOOMing The revised outlook reduces the gap between OPEC and several banks' projections, which predict that supply will exceed demand by 2026. In September, a poll of analysts suggested that the market would face a surplus of 1.6m bpd by 2026. This was due to the rising production of OPEC+ producers and non-OPEC ones, including the United States and Brazil. ExxonMobil, the U.S. energy giant, believes that oversupply will be a problem in the short term. Darren Woods, the company's chief executive, said that the oil market will be tighter in the medium- to long-term. The IEA's Latest Report The forecasts suggest that the supply of oil and gas may be greater than demand by 3.3 million barrels per day in 2026. The agency that advises industrialised nations is expected to update their forecasts on February 2. (Editing by Kirsten Doovan and Louise Heavens).
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OPEC maintains oil demand forecast, pointing to smaller supply deficit in 2026
OPEC did not change its forecasts on Monday for the relatively high growth in global oil demand this year and the next. It also implied that the oil market would see a smaller deficit of supply by 2026, as the OPEC+ group continues to increase production. OPEC+ has added more crude oil to the market since the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies have decided to undo some production cuts faster than originally planned. This extra supply has led to concerns of an oil surplus, and has weighed down on the price of crude this year. In a report released on Monday by OPEC, the group said that global economic growth was continuing to be solid. OPEC reported that OPEC+ increased crude production by 630,000 barrels a day in September to 43.05 millions bpd. This was due to its previous decisions to increase the output quotas. According to a report, if OPEC+ continues pumping crude oil at the same rate as September, the global market will experience a 50,000 bpd deficit. The report from last month suggested that OPEC+ would have a 700,000 bpd deficit in 2026 if they continued to pump at the rate of August. (Editing by Kirsten Doovan)
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OPEC data show that Russian oil production continued to increase in September.
OPEC's monthly data revealed on Monday that Russian oil production increased in September, to 9,321 million barrels a day, an increase of 148,000 bpd over August. The world's top oil-producing countries have continued to ramp up their production. Despite the increase, last month's output was below Russia's OPEC+ production quota of 9.415 millions bpd for September. OPEC+ - the Organization of the Petroleum Exporting Countries, plus Russia and a few smaller producers - has increased their oil production targets this year by over 2.7 million bpd, which is equivalent to around 2.5% of the global demand. After years of reductions, the policy shift is intended to gain market share away from competitors such as U.S. Shale producers. Alexander Novak, Deputy prime minister of Russia, said that Russia has gradually increased its oil production. In its monthly report OPEC said that Kazakhstan's oil production last month fell by 26,000 bpd. This is still higher than the quota of 1.550 million bpd set by OPEC+ in September. Kazakhstan is one of the main laggards when it comes to the OPEC+ agreement due to the increase in production at the Chevron Tengiz oilfield. It's the largest in the country. (Reporting and editing by Jan Harvey; Olesya Astalhova and Vladimir Soldatkin)
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Copper rally requires China's impetus in order to reach record levels
On October 9, copper prices reached $11,000 per ton, a milestone only seen twice before in the history the London Metal Exchange. Analysts are now wondering if the metal will ever reach a new high. Copper is used in construction and power. It was close to its all-time record of $11,104.50 set in May 2024. But it lost ground after U.S. president Donald Trump threatened higher tariffs against China. Benchmark copper traded at $10,644 per ton on Monday morning 1047 GMT. A weak dollar, and a string of mining accidents in the last few months have propelled metal prices higher in 2025, but demand is still in question. Ewa Mannthey, ING analyst, said that for the rally to continue, it will be necessary to see a strong growth in demand, especially from China. The bank also maintains a cautious view on the metal. "However, China's metals-intensive stimulus would increase demand and prices." This year, there have been disruptions at key copper mines including Grasberg, in Indonesia. Opinions differ, however, on whether the metal is in fact scarce or if prices are being inflated by speculators. The International Copper Study Group predicts a deficit of 150,000 tons in 2026 due to the force majeure situation at Grasberg. However, it still expects a surplus of 178,000 tons this year. BNP Paribas, after adjusting its annual loss allowance to account for the lower Grasberg production, expects a balanced copper market in 2019. David Wilson, senior commodity strategist at the Bank, said that "no one is struggling to get copper." "Funds may push industrial metals up, but industrial consumers won't buy it." The total copper stocks at the LME Shanghai Futures Exchange, and Comex is around 556,000 tonnes. Most of the copper is traded on the Comex system The United States has a surplus of copper, as the inventory that was built up before the impending U.S. tariffs were imposed on the metal had not been depleted. ShFE copper stocks The total is just over 110.000 tons, which is the highest level since April 25, but down nearly 60% compared to February.
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ILZSG: Global markets for refined zinc and lead will face surpluses in 2026.
International Lead and Zinc Study Group said that the global refined zinc and led markets will have larger surpluses by 2026. The group estimates that the global surplus of lead metal refined will be 91,000 tonnes in 2025, and the global surplus of zinc metal refined will be 85,000 tons. The group stated that global demand for refined lead will increase by 1.8% this year to 13,25 million tonne and by 0.9% in 2026 to 13,37 million tonne. Production is also expected to rise by 2% in 2025 to 13.34 millions tonne and by 1% in 2026 to 13.47 millions mtonne. In 2026, the growth of supply will be driven by Europe and China. Australia and the United States are also recovering their output. Demand for refined zinc is expected to rise by 1.1% in 2025 to 13.71 millions tons and by 1% in 2026 to 13.86 millions tons, while production will increase 2.7% in 2025 to 13.80million tons and 2.4% in 2026 to 14.13million tons. The group noted that by 2026, the global production of zinc is expected to increase due to the availability of more concentrate. Increases are also expected in Brazil Canada and Norway. In China, a new smelter Huoshaoyun, which will begin commercial production at 500,000 tonnes per year, will be launched. The group also noted that the new Verkhny Ufaley Smelter in Russia will boost production. ILZSG stated that after declining in 2023-2024, the world zinc mine production is expected to increase 4.6% in 2025 to reach 12.51 million tonnes, mainly due to a 5% rise outside China. On Friday, zinc was trading at around $3,006 per metric ton, while lead was around $2,003. Sherin Elizabeth Mukherjee and Anushree mukherjee, reporting from Bengaluru. Editing by Chizu nomiayama.
What is causing India's silver shortage this holiday season?
India's silver prices are significantly higher than global averages, as India is the world's largest consumer of precious metals. This is due to the soaring demand for the metal from investors.
Exchange-traded funds with physical backing have suspended new subscriptions after the premium jumped up to 10%.
Jewellers struggle to meet the strong demand for silver ahead of Diwali - the Hindu festival when purchases of the metal are traditionally high.
Why is there a shortage of silver?
The global silver demand has been outpacing supply over the last four years. This is a result of the five-year surplus that was produced. Silver production will still be unable to keep up with demand in 2025 as 70% of it is produced by mining other metals. This limits the ability to respond quickly to price changes.
Despite the shortage of supply, demand for industrial products, particularly in renewable energy and high tech sectors, continues to rise.
The structural deficit has been exacerbated by the large investment in physical ETFs and coins. Prices have also reached new highs.
Silver shipments into the United States have increased since its inclusion on a draft U.S. Critical Minerals list in September.
Why is India being badly affected by the SILVER shortage?
India is the largest consumer of the metal. It uses it in silverware, jewellery and coins. Bars are also used for industrial purposes, from solar energy to electronic devices. More than 80% its demand is met by imports.
Silver imports dropped by 42% in the first eighteen months of 2025 to 3,302 tonnes, but investment demand, particularly from ETFs rose to record highs. This surge consumed the excess imported in 2024. Now, additional overseas shipments are needed to meet this shortage.
Why is India unable to import large quantities of silver?
Normal circumstances would encourage Indian banks to increase imports in order to benefit from the large cash premium.
The physical market has tightened in major trading centers due to a combination of factors including limited supplies coming from the main producing countries, a strong industrial demand and high investment, as well as logistical bottlenecks. Lease rates in London have increased by more than 30%.
WHY HAVE INDIAN ETFS SUSPENDED NEW SUBSCRIPTIONS?
In September, silver ETFs experienced a record inflow. This trend continued through early October. According to regulatory rules, physical backed ETFs are required to hold the subscribed silver amount in physical form. This is typically purchased from bullion dealers and banks.
When they attempted to purchase silver last week, however, they had to pay high premiums.
These premiums increased the acquisition costs for new subscribers. ETFs temporarily suspended subscriptions to protect investors from paying high prices.
How are other companies adjusting to the silver shortage?
Silverware is scarce, and manufacturers are unable to produce it. Coins and bars, popular gifts for the holidays, are also at a premium.
Investors are expecting higher prices and few people want to sell their old scrap. This is keeping the supply of scrap tight. (Reporting and editing by Mayank Bhardwaj, Jan Harvey, and Rajendra Jadhav)
(source: Reuters)