Southern Silver Exploration Corp. (TSXV: SSV, SSEV: SSVCL, OTCQX: SSVFF)
Southern Silver, a low-risk junior development company with substantial upside potential that is emerging as one of the premier Ag-Pb-Zn companies in Mexico
In the first half of 2026, the LME base metals market experienced sharp divergences in price movements under the dual pressures of geopolitical shocks and macroeconomic uncertainty. The war directly disrupted short-term supplies and logistics for varieties such as aluminum and copper, while zinc and tin carved out their own independent trends due to structural supply-demand imbalances. The nickel market was entirely driven by policy expectations, and the lead market remained mired in a deep surplus. Overall, the war premium was unevenly distributed across different metals, and as peace negotiation processes advanced, the market was rapidly repricing. Nevertheless, low inventories, fragile supply chains, and policy uncertainty remained the overarching themes running through the market.
The navigational status of the Strait of Hormuz resembled a quantum state, at times rumored to be open and at other times rumored to be closed, depending on the stance of the speaker. Against this backdrop, the LME index covering six base metals fluctuated wildly over the six-month period, ultimately closing in the middle of its range, with significant divergences in performance among individual metals.
Aluminum was a direct “victim” of the war’s impact. Two smelters in the Gulf region were hit by missile attacks, and other facilities faced logistical constraints, resulting in severe regional supply damage. Data from the International Aluminum Institute showed that between February and May, annualized production in the region fell by 2 million metric tons. This supply shock pushed LME three-month aluminum to $3,787.50 per metric ton in early June, a four-year high. However, as the market began pricing in a return to some form of normalcy, the war premium has now almost completely evaporated. The new normal also includes persistently low LME inventories, with total registered and cancelled warrants shrinking to just over 400,000 metric tons, the majority of which is Russian metal.
For the already chaotic copper market, the war introduced new uncertainties. At the macroeconomic level, the war’s potential drag on global economic growth was bearish for copper prices; but at the micro level, the blockade of the strait led to a shortage of sulfuric acid, putting pressure on copper producers using leaching technology. The copper concentrate market was dysfunctional due to a sharp drop in smelter treatment charges. At the same time, the refined copper market remained nervously awaiting former U.S. President Trump’s decision on tariff hikes, with the high premium in the U.S. market continuing to attract global metal inflows. Amid a mix of bullish and bearish signals, LME three-month copper traded in a range between $13,000 and $14,000 per metric ton since mid-May. Nonetheless, investors remained favorable to the long-term narrative of structural copper supply shortages.
Zinc was the “surprise star” of the first half, performing impressively despite having little direct connection to the war. LME three-month zinc hit a nearly four-year high of $3,658 per metric ton in early June, posting a 14% gain in the first half, second only to tin. The market had initially expected a large supply surplus in the global zinc market this year, but the latest assessment from the International Lead and Zinc Study Group showed a modest deficit, with the shortfall concentrated mainly outside China, where smelter output continued to fall short of expectations.
The core of nickel trading remained centered on Indonesia and government policies to control excessive production. A sharp reduction in annual mining quotas at one point pushed LME three-month nickel to a two-year high of $20,000 per metric ton. Tight sulfur supplies in the Gulf also exacerbated production pressures on Indonesian HPAL plants. However, widespread market speculation that Indonesia would ease mining quotas quickly sent prices back down to around $16,000 per metric ton. Until policy clarity emerged, surplus metal continued to accumulate, with SHFE inventories breaching 100,000 metric tons for the first time since 2016.
Tin performed strongly due to growing demand for electronic soldering and structural supply shortages, rising 27% in the first half to lead the LME metals complex. In contrast, the lead market was suppressed by excess metal, falling 7% in the first half, with LME registered and cancelled warrant stocks hovering around 500,000 metric tons. Lead has replaced aluminum as the preferred choice for inventory financiers, which in itself reflects the dramatic changes in the aluminum market dynamics since the Iran conflict.
