Summary
The base metals complex enters the second half of 2026 on the tightest visible inventory base in years. LME aluminium stocks have fallen below 300,000 tonnes for the first time since 2022, copper's forward curve sits in backwardation with exchange holdings near historic lows, and both metals carry six-figure deficit forecasts for the year. Zinc is the outlier, heading into surplus as new mine capacity commissions. The mid-year picture is therefore one of divergence, not a uniform bull run — and the swing factors are Chinese smelter maintenance, alumina's supply cushion, and Strait of Hormuz shipping risk.
This outlook covers the base metals Arian Holding trades day to day — copper cathode and wire rod, aluminium ingot and billet, and zinc — listed on our Non-Ferrous Metals catalogue within the Industrial Products & Commodities sector. Figures below are indicative market levels and published forecasts, expressed as ranges and directions rather than firm prices.
Driver 1 — Copper: a market running on one day's stock
Copper set the tone for the first half, with the LME three-month contract breaching US$14,000/t to a record near US$14,153/t on 13 May before easing back toward the low US$13,000s by late June, according to exchange and market data. What matters more than the level is the structure: the forward curve has moved into backwardation — near-dated contracts trading above distant ones — and LME inventories have fallen to levels equivalent to roughly a single day of global consumption. UBS estimates a 2026 refined deficit near 520,000 tonnes, with demand growth around 2.8% outpacing refined supply growth of roughly 1.7%.
Supply-side friction is compounding it. Concentrate remains scarce, smelter margins are compressed, and unplanned and planned outages keep biting — Konkola Copper Mines took its Nchanga smelter down for a 60-day maintenance shutdown from June, with output due back in August. Chinese smelters enter their own maintenance window through Q3, which is the single most-watched variable for stock levels over the next twelve weeks. Not every forecaster is bullish, though: Goldman Sachs expects copper to decline somewhat from record highs through 2026, and consensus end-2026 base cases cluster in the US$12,000–13,500/t band — below where the metal has been trading.
Driver 2 — Aluminium: tight metal, comfortable alumina
Aluminium's story is a tale of two layers. At the metal layer it is genuinely tight: LME futures were around US$3,160/t in early July, holding most of a rebound off a four-month low near US$3,085/t, while LME warehouse stocks slipped to roughly 298,775 tonnes — under the psychologically important 300,000-tonne mark and the lowest since 2022. Macquarie forecasts a 930,000-tonne shortfall this year; other analysts model a structural deficit closer to 600,000 tonnes. China's effective output ceiling near 45 million tonnes a year removes the traditional supply release valve.
At the raw-material layer, the pressure is absent. The alumina benchmark has held near US$330/t, and is broadly expected to stay in a US$320–330 range as new refinery capacity in Indonesia and India offsets demand lost to smelter shutdowns. At roughly two tonnes of alumina per tonne of aluminium, that is about US$660/t of input cost — near 21% of the three-month price, a historically comfortable ratio. The implication: smelter economics are healthy, so the deficit is a demand-and-capacity story rather than a cost-push one, and it will not self-correct quickly.
Sitting over both is freight. Renewed disruption risk around the Strait of Hormuz has weighed on prospects for restoring regional supply and continues to inject a premium into delivery timing rather than headline metal price — a distinction worth holding onto when comparing offers.
Driver 3 — Zinc: the surplus metal
Zinc diverges cleanly from the other two. Mine and smelter expansions are outpacing tepid demand growth, pointing to notable oversupply across 2026–27. Expansion at Rosh Pinah and Vedanta's Gamsberg comes on stream around mid-2026, with greenfield capacity at Tala Hamza in Algeria scheduled for this year and a new zinc circuit at Asmara in Eritrea due in late 2026–2027. Chinese smelter stockpiling is pressuring treatment charges, metal is flowing into LME warehouses, and European smelter expansions are commissioning — a combination that biases the price softer into the second half even after a firmer first quarter. For galvanising and alloy programmes, this is the most comfortable buying window in the complex.
Scenarios for H2 2026
Rather than a single point forecast, we frame three plausible paths. Directional ranges only — not price guidance.
| Scenario | Copper (LME) | Aluminium | Zinc | What drives it |
|---|---|---|---|---|
| Base | Holds a firm US$12,500–13,500/t range, backwardation persists | Grinds higher from ~US$3,160/t as stocks stay under 300kt | Drifts lower on building surplus | Chinese Q3 maintenance offsets demand cooling; alumina stays cheap; new zinc capacity lands on schedule |
| Bull | Retests the May record above US$14,000/t | Runs toward the US$3,400–3,800/t forecast band | Stabilises on restocking | Further smelter outages, Hormuz disruption and grid/AI demand deepen an already-visible deficit |
| Bear | Unwinds toward US$12,000/t as Goldman-style downside plays out | Slips back to the ~US$3,085/t July low | Surplus weighs further | Demand disappoints, restarts arrive faster than modelled, and low stocks prove a positioning artefact rather than scarcity |
What this means for buyers
The honest read for the second half is that copper and aluminium are expensive for a reason and zinc is cheap for a reason — and that the three should be bought differently. On copper, backwardation penalises carrying forward cover but rewards securing physical availability; where a programme is copper-intensive and delivery-critical, availability is worth more than the last hundred dollars of price. On aluminium, the sub-300kt stock figure argues for locking ingot and billet volume before the Q4 restocking window rather than after it. On zinc, patience is defensible: the supply pipeline is visible and dated.
Arian Holding's global sourcing network and quality-assurance teams can structure compliant, certified non-ferrous supply across grades, backed by the supply-chain and logistics reach that keeps material moving through volatile freight windows — which, in a backwardated market, is where the real cost sits. Browse specifications on the Non-Ferrous Metals page; project teams balancing metals against structural requirements will find our Steel Products and semi-finished catalogues alongside it.
Ready to fix supply against this outlook? Request a quote and our trade desk will respond with current, firm pricing for your specifications.
Sources: Goldman Sachs Research; StoneX Base Metal Quarterly Outlook Q3 2026; Fastmarkets; Trading Economics; Discovery Alert; International Copper Association Australia; Westmetall; London Metal Exchange; UBS and Macquarie research as reported. Forecasts and figures are indicative and provided for general information, not as trading or investment advice.