On Tuesday, aluminum prices approached their highest level since early 2022, while tin also extended its robust upward trajectory, as expectations of tightening global supply bolstered bullish sentiment in the metals market. Most London Metal Exchange (LME) metals advanced, continuing the strong gains from the previous trading session, with the exception of copper. LME aluminum edged closer to Monday's peak of $3,200 per tonne, missing the high by a mere $0.50; tin prices rose for a third consecutive session, accumulating a near 20% gain year-to-date. Base metals have started 2026 on a strong footing, building on last year's solid performance, primarily fueled by market expectations that supply will struggle to keep pace with demand amid the U.S. Federal Reserve's ongoing interest rate cuts. The booming artificial intelligence sector has further stimulated demand for metals essential for data centers, power grids, and electronics—particularly copper—while speculative buying from China has also contributed to the rally. So far this year, tin has been the standout performer on the LME, with its price approaching the historical high of $51,000 per tonne after surging nearly 40% in 2025. Last year, a crackdown by the Indonesian military on miners in the world's second-largest tin-producing nation led to supply constraints, and the industry is closely watching export developments in the coming months. According to market analysis and forecasts for 2026, the tin market is expected to remain in a tight supply-demand balance over the next several months (from Q2 2026 to year-end), characterized by persistent supply limitations and resilient demand, especially from the semiconductor and emerging technology sectors. As a major global supplier of refined tin, Indonesia's export policies and actions against illegal mining, such as the closure of unauthorized mines, introduce regulatory uncertainty and potential risks of supply disruptions. Meanwhile, the aluminum market is also projected to experience tightening conditions and strong price dynamics. On the supply side, global primary aluminum production growth remains sluggish, constrained by rigid capacity caps in China and production cuts overseas, notably in Europe due to high energy costs. On the demand side, substantial investments in global power grids and energy storage facilities (such as photovoltaics), coupled with robust growth from "new economy" sectors like AI data center construction, continue to drive consumption. Driven by these factors, the market widely anticipates a supply deficit in the global aluminum market for 2026, providing solid support for prices and suggesting potential for further increases beyond recent highs. At the time of writing, LME aluminum was up 0.1% at $3,187.50 per tonne, while tin rose 1.1% to $48,470 per tonne. Singapore iron ore futures edged down 0.1% to $109.10 per tonne, after settling at their highest level since October 2024 on Monday.
Comments