Fastmarkets has released its September 2026 base metals market update, providing comprehensive analysis across six key commodities as the sector navigates a complex landscape of supply constraints, macroeconomic uncertainties and geopolitical pressures. COPPER: BULL STORY INTACT DESPITE MACRO RISKS Copper markets are building pressure toward an all-time high, with three-month LME prices having overcome January highs and opening the way for a potential move to the $15,000 per tonne level, according to Fastmarkets analysis. The market experienced a brief easing of tightness following copper inflows into LME warehouses in August, but global tightness outside the United States remains a dominant factor.
A critical constraint is emerging in the refining sector. Treatment and refining charges have fallen to record lows, with Fastmarkets' late-August assessment at $(232) per tonne, compared with $(141.79) at the start of June. This deterioration is increasingly squeezing custom smelters' margins, which may lead to refined production cuts, especially when long-term TCRCs come up for renewal.
Such production reductions could drive further drawdowns in exchange stocks and push prices and backwardations higher. Weather patterns present an additional upside risk. A 'super El Niño' phenomenon could tighten the market even further.
However, William Adams, Director of Market Insight at Fastmarkets, noted that while copper's bull story remains alive, the market must remain mindful of macroeconomic headwinds. Rising bond yields, gold and cryptocurrency prices suggest investors are becoming increasingly nervous, and any equity market sell-off would likely drag copper prices lower. ALUMINIUM: SUPPLY EXPECTED TO REMAIN TIGHT THROUGH 2026 Global aluminium supply conditions are expected to remain tight throughout 2026, with market attention focused on recovery pace at affected Gulf smelters.
While planned restarts could gradually improve supply, uncertainty surrounding geopolitical developments and operational recovery timelines remains a significant risk factor. US-Canada trade tensions have evolved significantly beyond Section 232 tariffs. The US administration's aggressive onshoring agenda, supported by a 50 percent tariff on aluminium imports, has injected new life into the domestic primary aluminium industry.
Century Aluminum's Mt. Holly smelter has returned to full production, while Magnitude 7's New Madrid smelter could follow as power economics become increasingly viable. The proposed EGA-Century smelter project in Oklahoma represents critical future supply.
The LME aluminium market remains supported by tight physical conditions, low visible global inventories and ongoing supply chain disruptions. Fastmarkets expects these factors to continue underpinning dip-buying interest through the remainder of 2026. Andy Farida, Senior Analyst at Fastmarkets, stated that while additional supply is gradually entering the market, the current environment points to fundamentally tighter conditions than headline supply growth alone would suggest, laying foundations for potentially stronger aluminium prices in 2027 if inventories remain constrained.
NICKEL: RANGEBOUND PENDING INDONESIAN CLARITY The nickel market is in a consolidation phase with LME prices drifting sideways, awaiting clarity on two major constraints impacting production in Indonesia, the world's largest nickel-producing nation. The first constraint involves the Indonesian government's mid-year ore quota revisions. Earlier reports of an increase from an initial restrictive limit of 260-270 million wet metric tonnes to 360 million WMT were denied, and the inability to confirm the higher figure is subduing nickel prices.
The second constraint concerns sulfur availability due to disruptions in supply from the Middle East. Preliminary trade data showed a surge in Indonesian imports in July, though this appears to reflect a backlog of material from the Persian Gulf shipped during a ceasefire rather than resolution of the underlying shortage. Fastmarkets expects the sulfur squeeze to continue restraining production into 2027.
Andrew Cole, Principal Analyst at Fastmarkets, indicated that LME nickel prices are likely to remain rangebound until clarity emerges on Indonesian ore quota revisions and sulfur supply status. Depending on these outcomes, nickel could realistically run up to challenge $18,000-20,000 per tonne or fall toward $12,000-14,000 per tonne over the next six months. LEAD: SHORT-TERM GAINS POSSIBLE AMID CHINESE SMELTER SQUEEZE Lead markets have scope for short-term price gains, with support around $1,850 per tonne remaining firm.
Buoyant risk appetite could lift prices into the mid-$1,900s, though rallies toward $2,000 still require convincing stock draws or stronger battery demand. China's smelter squeeze represents the clearest upside risk. Record-low treatment charges, tight concentrate and scrap availability, and heavier maintenance could deepen refined output cuts, leaving the global market with little cushion against disruption.
A secondary bullish factor is the heavily net short positioning by funds. Any tightening in LME spreads, warehouse outflows or seasonal replacement-battery demand could trigger aggressive short-covering moves. James Moore, Senior Analyst at Fastmarkets, noted that tightening Chinese supply, record-low treatment charges and firmer physical demand could unleash short-covering gains in lead markets.
ZINC: SUPPLY DISRUPTIONS SUPPORT BULLISH SENTIMENT Zinc is approaching the pivotal $4,000 per tonne level following stellar gains in August. A sustained break above this level could unlock the next leg of the rally, while failure would leave prices vulnerable to sharp correction. El Niño weather patterns and diesel shortages are increasing supply risks, and with zinc stocks already low, weather-related or fuel-related disruptions could quickly tighten LME backwardation and trigger sharp price spikes.
Chinese exports could ease the squeeze temporarily, though low treatment charges, weak margins and winter power constraints raise the risk of Chinese smelter curtailments, limiting export availability and keeping the refined market tight. Moore stated that sentiment remains bullish, with the market pricing in growing supply risks, though broader financial market complacency warrants caution. The ability of zinc to establish a firm base above $4,000 per tonne will be critical.
TIN: ELEVATED PRICES BUT IMPROVING SUPPLY RAISES DOWNSIDE RISKS Tin prices remain stubbornly high despite fading momentum, with LME tin continuing to trade around $55,000-56,000 per tonne. Inventories stood at just 5,415 tonnes, with cancelled warrants at 26.5 percent. Myanmar remains the missing supply response.
China imported 16,958 tonnes of tin concentrates in July, but Myanmar shipments fell 27 percent month on month to 4,570 tonnes. Diversification toward the DRC, Bolivia and other suppliers is cushioning the shortfall but has yet to recreate historical Wa State availability. Demand is stronger structurally than physically.
Global semiconductor sales reached $403.3 billion in Q2, while China's August high-tech exports rose 42.9 percent year on year. Yet Chinese tin buyers remain price-sensitive, with spot activity dominated by just-in-time procurement. Rory Deng, Analyst at Fastmarkets, stated that tin is moving from a scarcity rally into a scarcity test.
Low stocks mean the market has little tolerance for another supply disappointment, but stable physical buying suggests no acute squeeze. Another leg higher requires fresh disruption, while a correction only requires Myanmar and Indonesia to deliver expected supply. Source: Fastmarkets Base Metals Market Update, September 2026
Source: fastmarkets.com