London Metal Exchange base metals posted broad gains on Tuesday, August 4, as renewed hopes for a diplomatic resolution between the United States and Iran triggered a relief rally across the complex, with lead among the metals recording positive momentum. LME three-month lead futures rose to $1,884 per tonne as of 10:58am on Tuesday, up 0.91% from Monday's 5pm close, according to Fastmarkets. The move tracked a wider recovery across the base metals spectrum, with copper gaining 1.16% to $14,031 per tonne, aluminium advancing 1.30% to $3,263.50 per tonne, nickel rising 1.35% to $17,290 per tonne, zinc climbing 0.60% to $3,663 per tonne, and tin up 0.88% to $55,935 per tonne.
The catalyst behind the broad-based advance was a combination of geopolitical easing and currency dynamics. Oil prices retreated on reports that the US and Iran are expected to decide on whether to reopen the Strait of Hormuz on Wednesday, a development that weighed on the US dollar and lent support to commodities priced in the greenback. A weaker USD typically provides upward pressure on base metals valuations.
"The base metals sector started the week stronger as a weaker USD lent support to commodities priced in the greenback. The selloff in oil amid hopes of a de-escalation in the Middle East conflict also supported risk appetite," Dan Hynes, chief strategist at ANZ, said. The geopolitical backdrop had previously weighed heavily on global metal trade routes.
Prior to the resumption of peace talks, rising hostilities had forced the closure of the Bab-el-Mandeb Strait between Yemen and Eritrea, further constraining access to the Gulf of Aden, the Red Sea, and the Arabian Sea. "The disruption of two of the world's most critical maritime chokepoints raises significant concerns for global metal trade routes," Andy Farida, analyst at Fastmarkets, said. "With safe passage becoming increasingly constrained, some cargoes may be forced to divert around the Cape of Good Hope, materially extending transit times while increasing freight and insurance costs," he added.
Analysts at Sucden Financial urged caution on the sustainability of the rally in aluminium, noting that prices had reclaimed the $3,200 per tonne threshold but warning that holding at these levels would require either a renewed Middle East shock or another clear supply-risk catalyst. Aluminium stocks on the LME edged lower by 5,675 tonnes to a total of 238,350 tonnes. On the nickel front, Fastmarkets analysts noted that improving US-Iran relations had reduced immediate concerns over both oil prices and Indonesian sulfur supplies, the latter being a key input in high-pressure acid leaching processes used to extract nickel.
However, market uncertainty persisted over the outcome of negotiations, with participants focusing instead on Indonesian RKAB mining quota approvals as the primary support driver. Nickel stocks remained unchanged at 264,876 tonnes compared to Monday's close. The broader market sentiment suggests that while the geopolitical thaw provided a short-term boost across base metals including lead, the durability of the rally will hinge on the concrete outcome of the US-Iran negotiations and any resolution regarding the reopening of critical maritime passages.
Source: Fastmarkets, August 5, 2026.
Source: fastmarkets.com