--- title: "CITIC Construction Investment: LME spot prices surge, copper prices approach historical highs" type: "News" locale: "en" url: "https://longbridge.com/en/news/296035726.md" description: "CITIC Construction Investment's research report points out that LME copper spot has seen a rare strong premium, reflecting extremely tight inventories, with copper prices approaching historical highs. Although non-ferrous commodities have encountered profit-taking in the short term, given the onset of the Federal Reserve's interest rate cut cycle, global low inventories, and demand driven by new energy, it is recommended to remain patient. Meanwhile, employment and inflation data have reduced interest rate hike expectations before the midterm elections. Although gold prices are under pressure at the $4,500 level, they are still in a favorable period, and in the medium to long term, central bank gold purchases and geopolitical factors support gold premiums" datetime: "2026-08-16T23:54:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296035726.md) - [en](https://longbridge.com/en/news/296035726.md) - [zh-HK](https://longbridge.com/zh-HK/news/296035726.md) --- # CITIC Construction Investment: LME spot prices surge, copper prices approach historical highs According to the Zhitong Finance APP, CITIC Construction Investment has released a research report stating that this week, non-ferrous commodities encountered some profit-taking at their respective key resistance levels, and non-ferrous equities also saw some realization of gains. However, given that commodity prices still have significant upward drivers, it is recommended to be more patient with non-ferrous investments. Gold prices are temporarily under pressure around the $4,500 mark, but employment and inflation data have reduced the likelihood of interest rate hikes before the mid-term elections, keeping gold prices in a favorable period. The copper spot market has shown a rare high premium situation, highlighting the extremely tight inventory status, with copper prices nearing historical highs, and the equity priced at 100,000 copper at just over 10 times provides sufficient safety margin, highlighting the cost-effectiveness of the allocation. ## The main points of CITIC Construction Investment are as follows: **Industrial Metals:** This week, the prices of LME copper, aluminum, lead, zinc, and tin changed by 1.1%, -0.8%, 0.6%, 1.7%, and 1.4%, respectively; the prices of industrial metals are determined by both "financial attributes" and "commodity attributes." From a financial perspective, the Federal Reserve has entered a rate-cutting cycle; from a commodity perspective, global copper and aluminum inventories are at relatively low levels, and the recovery of the Chinese economy is expected, coupled with the boost from the new energy industry, the demand for copper and aluminum is expected to improve. **LME spot strong premium, copper prices approaching historical highs** **(1) Gold: Optimism slightly cools, gold prices hover around $4,500.** This week, the U.S. released July price data, with the CPI rising 3.4% year-on-year, the lowest year-on-year increase since March this year; the core CPI rose 2.5% year-on-year. After the data was released, market expectations for a Federal Reserve rate hike significantly cooled to around 35%, but after a rapid rebound in gold prices, profit-taking led to gold prices temporarily under pressure around the $4,500 mark. The probability of the Federal Reserve raising interest rates before the mid-term elections is continuously decreasing, creating a favorable period for gold prices. In the medium to long term, the structural expansion of deficits in major economies, strategic gold purchases by central banks, and the intensification of geopolitical conflicts continue to maintain a premium for gold over sovereign credit systems. The World Gold Council's "2026 Global Central Bank Gold Reserve Survey" shows that 89% of central bank reserve managers expect global central bank gold reserves to continue to increase in the next 12 months. ![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/252125ad4944b8bc30f593b5295bb8df.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) **(2) Copper: LME spot strong premium, copper prices approaching historical highs.** On one hand, the Comex-LME price spread is expanding, highlighting the market's bet on President Biden's announcement of additional tariffs on copper on September 30. As the C-L price spread widens, arbitrage activities for transporting goods to the U.S. are increasing, and non-U.S. regional inventories continue to decline, making the spot market increasingly tight. The LME spot copper premium relative to three-month copper reached $434/ton, higher than the $45 two weeks ago, marking the highest level since October 2021. The price structure of near-month contracts being higher than that of far-month contracts highlights the severe inventory shortage, which is very favorable for strong commodity prices, and the current copper price is just a step away from the historical high of $14,527.5/ton, with strong momentum to break through the high point Global copper mine output this year has once again fallen short of expectations, with global refined copper in a state of overall shortage. Coupled with localized tensions caused by U.S. cargo movements, copper prices remain strong. ![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/1b6107607c640a2039a9f29d42eb3e0a.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) **(3) Aluminum: Middle East production recovery does not change the shortage this year, aluminum prices maintain an upward trend.** This week, LME aluminum fell by 0.76% due to the UAE aluminum industry's recovery process being slightly faster than market expectations. The Middle East has reduced production capacity by 2.86 million tons this year, and Mozambique has shut down 520,000 tons of capacity, resulting in a global electrolytic aluminum supply shortage of 1.2 million tons this year. Domestic and foreign inventories continue to deplete, with domestic inventory officially dropping below 900,000 tons and LME inventory decreasing to below 250,000 tons. The Middle East has begun to recover production, and there is attention on the commissioning of millions of tons of new overseas capacity, but these are all future production increments and do not solve the reality of the shortage this year. The short-term gap will drive aluminum prices to rebound, and the outstanding performance of aluminum companies will promote the recovery of aluminum-related assets. ![Image](https://imageproxy.pbkrs.com/http://img.zhitongcaijing.com/images/contentformat/08ee891c936c943004d797a17c49e94e.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) **Risk Warning** 1. A significant global economic recession leading to a cliff-like decline in consumption. The World Bank has raised its global economic growth forecast for 2026 from the previous 2.3% to 2.6% in its latest "Global Economic Outlook," but economic growth has shown a slowing trend in recent years. If the global economy falls into a deep recession, it will have a huge impact on the consumption of non-ferrous metals. 2. U.S. inflation out of control, with the Federal Reserve tightening monetary policy more than expected, and a strong dollar suppressing equity asset prices. The U.S. has been unable to effectively control inflation, leading to continuous interest rate hikes. The Federal Reserve has made significant consecutive rate increases, but service costs, especially rents and wages, have shown stickiness that restricts the decline of inflation. If the Federal Reserve maintains high-intensity rate hikes, it will be unfavorable for non-ferrous metals priced in dollars. 3. Domestic new energy sector consumption growth is below expectations, and the real estate sector's consumption remains sluggish. Although policies on the real estate sales side have been relaxed to varying degrees, residents' purchasing willingness is insufficient, and the progress of resolving real estate companies' debt risks is not smooth. If sales continue to show no improvement, the completion of real estate projects may face a risk of stalling, which would be detrimental to the consumption of certain non-ferrous metals in the domestic market ### Related Stocks - [IAU.US](https://longbridge.com/en/quote/IAU.US.md) - [SGOL.US](https://longbridge.com/en/quote/SGOL.US.md) - [GLD.US](https://longbridge.com/en/quote/GLD.US.md) - [GLDW.US](https://longbridge.com/en/quote/GLDW.US.md) - [DBB.US](https://longbridge.com/en/quote/DBB.US.md) - [GLDM.US](https://longbridge.com/en/quote/GLDM.US.md) - [159881.CN](https://longbridge.com/en/quote/159881.CN.md) - [518850.CN](https://longbridge.com/en/quote/518850.CN.md) - [159880.CN](https://longbridge.com/en/quote/159880.CN.md) - [159876.CN](https://longbridge.com/en/quote/159876.CN.md) - [561330.CN](https://longbridge.com/en/quote/561330.CN.md) - [DULL.US](https://longbridge.com/en/quote/DULL.US.md) - [SHNY.US](https://longbridge.com/en/quote/SHNY.US.md) ## Related News & Research - [METALS-Tight availability pushes copper higher, key spread wider](https://longbridge.com/en/news/296053087.md) - [GRAPHIC-Gold shows early signs of reclaiming safe-haven appeal after Iran war selloff](https://longbridge.com/en/news/296127032.md) - [METALS-Copper prices hit 6-month peak on low inventories](https://longbridge.com/en/news/296086595.md) - [METALS-Aluminium touches seven-week high on waning stocks](https://longbridge.com/en/news/295482284.md) - [METALS-Copper drifts lower on profit taking, economic uncertainty](https://longbridge.com/en/news/295918214.md)