The factors are repositioned when there's movement in prices and/or supply/demand balances.
Global Supply Demand (Neutral, Priced-In):
Chinese aluminum demand has remained weak despite some signs of improvement in economic data. Meanwhile, China's Global aluminum production continues to rise, with China being the leading producer.
USD (Bearish, Priced In):
Any potential strength in the USD could potentially weigh on metals pricing. Last year the USD posted a significant rally, but has turned lower in 2025.
Energy Costs (Bearish, Partially Priced In):
Natural gas prices have come down relative to the start of the year, but forward prices remain very elevated. Higher gas and electricty prices could hurt margins for metals processors.
Economic Slowdown (Bearish, Priced In):
Concerns that tariffs and the recent trade war could lead to a slowdown in global economic growth have increased substantially in 2025. Weaker manufacturing activity would likely lead to less consumption of base metals.
Raw Materials (Bullish, Partially Priced In):
Shortages of raw materials can support metals prices, as processors may find it difficult to grow or maintain output.
Speculative Positioning (Bearish, Mostly Priced-In):
Investment funds, which are purely speculators in the aluminum and copper futures markets, can have a significant impact on financial prices. According to CFTC Commitment of Traders data, speculators remain net-long in Copper and Aluminum, but have reduced their positioning over the past few months.
Chinese Stimulus (Neutral, Partially Priced In):
China’s Politburo has pledged increased fiscal spending, “forceful” rate cuts, and stabilization of the property sector to meet annual economic goals, including easing restrictions on home-buying in major cities that support base metals demand. Investors are watching for signs that these measures will help lift the property sector from its prolonged slump. China’s real estate industry is a globally significant driver of metals demand.