In the first half of 2026, the non-ferrous metals market experienced a volatile pattern of "rallies, declines, rebounds, and further pullbacks." Looking ahead to the second half, several analysts believe the divergence among different metal varieties will intensify significantly, with copper prices expected to shift steadily higher, while metals like aluminum and tin are likely to exhibit more range-bound fluctuations.
Reflecting on the first half, the performance of non-ferrous metals was closely tied to events such as U.S. Federal Reserve monetary policy and geopolitical developments.
An analyst from Hongye Futures explained that following three consecutive Fed rate cuts at the end of 2025, ample liquidity fueled a sharp rally in non-ferrous metals prices in January 2026, with several varieties hitting record highs on January 30. However, as the Fed paused its easing cycle, market optimism waned, leading to a significant price correction in February. The outbreak of conflict between the U.S. and Iran in late February caused a major disruption to global crude oil supply, impacting market sentiment and resulting in mixed price movements for non-ferrous metals—copper, zinc, and tin fell sharply, while aluminum prices surged rapidly back to their yearly highs. In April, as tensions in the Middle East eased, demand from AI infrastructure construction drove prices of "computing metals" like copper and tin higher once again. Subsequently, with a U.S.-Iran ceasefire and shifting Fed policy expectations from rate cuts to hikes, non-ferrous metals prices retreated across the board from May through June.
A chief analyst from Guoxin Futures noted that in the first half, the domestic copper and aluminum markets largely followed the core logic of "macroeconomic headwinds being cushioned by industrial fundamentals," with distinct divergence between the two metals. Shanghai copper, supported by a long-term structural supply-demand gap, demonstrated resilience at elevated levels, underpinned by entrenched supply bottlenecks at the mine level, solid raw material costs, and incremental demand from new energy, power grids, and AI infrastructure, giving it exceptionally strong fundamental resilience. Shanghai aluminum, in contrast, was primarily characterized by geopolitical sentiment-driven moves and cyclical rotations, spiking early in the year due to geopolitical risk premiums before those premiums rapidly dissipated mid-year, returning prices to a conventional trading range.
Looking forward to the second half, both analysts agree that the divergence among non-ferrous metal varieties will further intensify.
The Guoxin Futures analyst stated that copper and aluminum performance may diverge sharply, with copper prices biased towards strong, volatile gains, while aluminum prices remain range-bound. Copper offers clear trend and allocation value, whereas aluminum presents only short-term trading opportunities. The logic and trend for Shanghai copper in the second half are clear, with the core contradiction being a definitive supply shortage offsetting uncertain macroeconomic disturbances. The overall pattern is expected to be strong, characterized by a solid floor, a breakable upper limit, a steadily rising price center, and significantly increased volatility. Long-term factors supporting higher copper prices include: insufficient global copper mining capital expenditure leading to supply shortages; the persistence of low global inventory levels; continued incremental demand from AI computing, power grids, and the new energy vehicle industry; and the long-term presence of Middle East geopolitical risks alongside uncertainty over U.S. tariff policies.
The Hongye Futures analyst indicated that current global copper supply and demand are relatively balanced, with domestic Chinese production reaching another record high. June marked the start of the domestic off-season, leading to weaker downstream demand. The main real-world factors currently supporting copper prices are U.S. stockpiling and arbitrage demand. Subsequent attention should focus on potential changes to U.S. tariff policies and the real-time premium of U.S. copper over LME copper. If U.S. copper tariffs remain unchanged, copper prices could face downward pressure.
The analyst forecasts that Shanghai copper prices are likely to trade between 98,000 and 110,000 yuan per tonne in July, with a broader range of 95,000 to 120,000 yuan per tonne for the second half overall. Prices are likely to break above the upper end of this range as macroeconomic sentiment improves or tariff policies are finalized. In the second half, Shanghai copper is viewed as a strategic long allocation, with a core trading approach of "adding on significant dips, avoiding chasing sharp rallies." It can serve as a core asset for hedging against inflation and global supply chain risks.
Regarding aluminum, the Hongye Futures analyst analyzed that in the first half, factors such as damaged capacity in the Middle East, logistical disruptions, and surging global energy prices led to a widening premium of LME aluminum over Shanghai aluminum. However, with U.S.-Iran negotiations progressing, Middle Eastern aluminum capacity has begun recovering, and global energy supply has increased, showing signs of weakening fundamentals for aluminum. Currently, China is in its seasonal demand lull, with spot demand being average. Influenced by expectations of Fed rate hikes, recovering Middle Eastern capacity, and falling energy prices, aluminum fundamentals appear weak, and the medium-term outlook is not optimistic.
The Guoxin Futures analyst judges that, with expectations for continued easing of Middle East tensions, Shanghai aluminum is likely to exhibit relatively weak unilateral trends in the second half, with a core trading range of 22,000 to 27,000 yuan per tonne. Price action will follow seasonal demand shifts and rotate with macroeconomic variables. Pressure from the traditional domestic consumption off-season combined with tightening liquidity pressures will weigh on aluminum prices overall, with a potential recovery window in the fourth quarter. As the domestic downstream peak demand season begins and overseas geopolitical and policy博弈 intensify, market volatility will amplify, leading to a significant lift in aluminum's price center. Trading Shanghai aluminum should focus on range-bound波段 strategies, with caution needed for news-driven, pulse-like price swings.
Concerning tin, the Hongye Futures analyst stated that fundamentals for the global tin market in the second half are mixed with both bullish and bearish factors, making a sustained one-way trend difficult. Prices are expected to maintain wide fluctuations, with the price center significantly higher than in previous years.
On the supply side, constraints on tin supply persist, with the core focus being the pace of mine restarts in Myanmar's Wa State after the rainy season ends in July, which is a key variable affecting annual supply. On the demand side, starting in August, the electronics, home appliance, and solar industries will enter their traditional peak consumption season, prompting downstream solder manufacturers to begin concentrated pre-holiday stockpiling. The analyst believes whether tin prices can sustain their high level around 440,000 yuan per tonne depends on the strength of peak season demand absorption. If end-user orders recover and companies actively replenish inventories, leading to stock drawdowns, tin prices could stabilize and rebound.
Regarding price action rhythm, the analyst expects tin prices to likely trend weaker in June and July, with close attention needed on the key support level around 380,000 yuan per tonne. If spot and import data fall short of expectations, tin prices could find a bottom and stabilize. After August, traditional peak season stockpiling combined with incremental demand from AI hardware and semiconductors could, if restarts in Myanmar and Indonesia disappoint, reignite low-inventory premiums, potentially initiating a new upward price cycle for tin.
The Guoxin Futures analyst specifically cautioned that volatility in the broader commodities market will intensify in the second half. Market participants must strictly control their overall risk exposure, while industrial clients should routinely use futures and options tools for hedging to lock in operational profits and hedge against market uncertainty.
Comments