What I Learned from the SMM Metals Conference

Good Evening,

I was on the ground at the SMM Asia Metals Seminar in Hong Kong today. Excellent content: deep dives, hard data, and no tourist-level macro. In this short episode, I run through key takeaways from the industrial and new energy metals sessions metal by metal, but first, do consider subscribing to the substack for much more of this.

Copper

• Global supply growth is flat: top producers (BHP, Codelco, Freeport) have shown zero structural output growth since 2020

• Models show upside to >$10,000/ton with base case at ~$9,800

• Inventories in China and Europe at multi-year lows, <2 weeks of demand cover

• Long-term capex shortfall of US$150 billion to meet 2035 demand

📈 Verdict: Strong long. Best setup in the market.

Zinc

• Refined market tight through 2025, but surplus expected by 2026

• TCs rising; mine supply returning

• Chinese refined output up +5.2% YoY, demand growth slowing

🧭 Verdict: Tactical only. Fade the strength post-2025.

Tin

• Global supply thin, highly concentrated (Indonesia, Myanmar)

• Inventories low: <30 days global coverage

• Demand anchored in semiconductors, solar, and industrial electronics

💡 Verdict: Optionality. Small market, big moves.

Nickel

• Indonesia to produce >50% of global supply by 2026

• LME + SHFE inventory rising; matte and sulphate margins deeply negative

• NPI-to-refined conversion loss: ~$900–1,000/t at current tolling fees

📉 Verdict: Structurally bearish. Narrative still lags reality.

Cobalt

• DRC still supplies 98–99% of China’s cobalt imports

• ARECOMS export ban triggered +89% spike in Co₃O₄ over 40 days

• But global supply rising: expected to grow from 309 kt (2024) to 390 kt (2030E)

⚠️ Verdict: Geopolitical squeeze short-term; surplus long-term.

Lithium

• China carbonate surplus: 5–9 kt/month expected through H1 2026

• Inventories elevated: 130,000+ tons in storage across chain

• LFP chemistry dominates; NCM market share declining steadily

• Cost curve: only Australian spodumene and Chilean brine consistently profitable

🪫 Verdict: Still oversupplied. Interesting only at the cost curve bottom.

Have a good day,

Leonid