LME Week: Powerful El Niño looms over global metals supply chains

Expectations of an exceptionally strong El Niño event are adding uncertainty to the near-term outlook for global metals markets. The World Meteorological Organization reinforced these concerns in September, presenting data indicating that the event could be the strongest in more than 70 years and persist until at least February 2027.

A powerful El Niño could disrupt metal supply by affecting mining, refining and transportation in vulnerable regions. Drought conditions may reduce water availability for copper, lithium and nickel operations, while lower hydropower generation could constrain smelter output and increase electricity costs. Conversely, heavier rainfall and flooding could damage infrastructure, restrict access to mines and delay shipments.

Latin America, Southeast Asia and Australia are particularly exposed, although the effects are likely to vary by region and commodity. Any resulting disruptions could further tighten already constrained markets, increase price volatility and encourage precautionary stockpiling.