Base Metal Rally Fades: Copper, Aluminum, Zinc Prices Face Headwinds in 2026

• Base metal prices, including copper, aluminum, zinc, lead, and nickel, reached multi-year highs by early 2026, driven by a weak US dollar, supply disruptions, strong demand from China and Europe, and investor buying.
• The London Metal Exchange Index (LMEX) hit a record high in January 2026, but this momentum is now expected to slow down.
• Factors contributing to the rally, such as a weak dollar and high investor interest, are weakening; the dollar is stabilizing, and global interest rates are expected to remain high.
• China's economic slowdown, particularly in real estate and infrastructure, is likely to reduce demand for metals.
• Supply of various metals is increasing faster than demand, leading to potential surpluses in copper, zinc, nickel, and lead markets, which could put downward pressure on prices.