Copper Prices Hold Steady Amid Uncertainty, Aluminium Rebounds

The London Metal Exchange (LME) opened the 2026 trading week with a focus on macroeconomic trends, AI demand, and supply chain resilience. Standard Chartered analysts noted that the LME has seen a 16% year-on-year increase in average daily turnover, reflecting strong market activity. However, the outlook for base metals remains mixed, influenced by macroeconomic conditions, geopolitical tensions, and supply-side challenges. Copper prices have surged 16% year-to-date, driven by ongoing supply disruptions and uncertainty over U.S. copper tariffs. Analysts have raised their 2026 copper price forecast to $13,674 per ton, citing continued supply constraints and the potential for further tightening of global inventories. The Comex-LME copper premium has narrowed, indicating a shift in market dynamics. Meanwhile, aluminium prices have declined as supply concerns ease, with Standard Chartered lowering their forecasts due to improved production in the Middle East, Indonesia, and China. The market has seen a return to pre-conflict price levels, with aluminium prices dipping below $3,000 per ton. The recovery in Chinese and European production, along with increased exports of semi-finished products, has helped alleviate some of the supply risks. Despite the drop, aluminium prices remain volatile, with mixed signals from time spreads and regional premiums. The market is closely watching developments in Chile, where copper output has fallen sharply due to production cuts and labor disputes. Analysts suggest that while copper faces near-term risks from geopolitical and macroeconomic factors, its long-term outlook remains positive due to sustained demand from AI and energy transition sectors.