2026 Global Base Metal Outlook

• At Cordoba, we remain constructively positioned on base metals with selective long exposure in copper, aluminium, and tin. The DRC cobalt export suspension and ongoing zinc stock imbalances underscore the fragility of global supply chains.
• We expect base metal market volatility after LME Week (Oct 14th 2025).
• We hold a bullish medium-term outlook for metals linked to technological and energy transition demand themes.

Three Major Macro Drivers for Pricing

Macro-economic landscape

• The US Federal Reserve is expected to deliver two further 25bps rate cuts before year-end and around 100bps of easing next year, putting downward pressure on the US dollar and two-year yields. This supports investment and infrastructure spending globally.
• Global PMI has hovered around 50, showing slight upward momentum. China remains in a stimulative policy environment heading into the start of its 15th Five-Year Plan, though risks persist due to negative CPI and a sub-50 average PMI over the past two years. 
• The Copper–Gold ratio rose last September as China unveiled one of its largest stimulus packages in recent years, and we expect a similar reflationary setup next year. However, renewed US–China tariff tensions could inject volatility, as evidenced by the copper price reaction to the Section 232 tariffs on unfinished copper products and scrap announced in July.

Fundamentals

• Demand side: Structural demand from AI infrastructure, data centres, and EVs continues to strengthen. Emerging markets are outperforming developed economies, underpinned by firmer PMI readings.
• Supply side: Supply growth is gradually accelerating, though global conflicts continue to elevate supply chain risks. Section 232 measures have had a greater impact on aluminium than copper, given aluminum’s high energy intensity and limited capacity expansion potential.

Investor sentiment

• In early 2024, copper prices were driven up largely by speculative flows rather than fundamentals, causing short-term volatility. The coming months may see a more balanced market, with fundamentals regaining influence as inventories tighten and stimulus measures filter through.

Tightening Cobalt Supply from the DRC

• The Democratic Republic of Congo (DRC) has extended its cobalt export suspension and plans to introduce a quota system from 16 October. With cobalt shipments typically taking around three months to reach China, refiners anticipate a notable supply gap just as seasonal demand for cobalt sulphate and tetroxide picks up in September and October.

• At Cordoba, we view this as the start of a short-term supply squeeze that could reverberate through China’s battery materials sector in the final quarter of 2025, particularly as electric vehicle (EV) manufacturers ramp up production before year-end.

• Spot cobalt hydroxide has become increasingly difficult to procure due to the recent price surge. In response, Chinese cobalt refiners are turning to cobalt metal as a substitute feedstock, supported by relatively higher inventories and more competitive pricing compared with hydroxide.

Zinc’s Drawdowns Without Demand

• Despite weak downstream demand, London Metal Exchange (LME) zinc inventories have been falling sharply. LME zinc stocks stood at 253,250 tonnes on 27 September last year but have since declined substantially, even though consumption remains sluggish across Europe, Asia, and the US.

• Much of the recent drawdown is not demand-driven, but rather linked to warehouse transfers and speculative positioning. A major commodity trading house has reportedly been withdrawing large volumes from LME warehouses in Singapore, possibly to buoy zinc prices, which have hovered around $2,900 per tonne in recent weeks following a mid-September rally to $3,000.

• While global LME inventories fall, Chinese zinc stocks have surged. Shanghai Futures Exchange (SHFE) zinc inventories rose to 100,544 tonnes as of 26 September, more than double the 45,364 tonnes seen in early July. This reflects a seasonal lull in demand during the summer months, with little sign of recovery so far.

• With domestic stockpiles swelling and LME prices rising, traders are now eyeing export opportunities. The recent narrowing of the LME–SHFE arbitrage loss could encourage refined zinc exports, though the market remains cautious given the lack of construction activity in China.

Key Dates to Watch

• 14 October 2025: LME Week, London
  
• Mid-November 2025: Deadline for US–China 90-day trade truce extension
  
• May 2026: End of Fed Chair Jerome Powell’s term — markets expect a more dovish policy tilt thereafter

Bottom Line:

• Long tin, aluminium, copper: Supported by long-term bullish fundamentals, structural supply constraints and strong demand from energy transition and AI sectors. Tin remains the most volatile due to lower market liquidity. Copper, currently trading at $10,715.5 per tonne, remains attractive on AI-related demand growth.
  
• Hold lead and zinc: Lead’s outlook is challenged by the shift from lead-acid to lithium-ion batteries, while zinc faces potential surplus next year as new mine capacity comes online.
  
• Short nickel: The market is in its largest surplus since 2018, with steady Indonesian supply keeping prices near $15,500 per tonne.