Metals selloff reshapes winners and losers amid tariff, rate uncertainty
This digest was compiled by AI from multiple sources — links to the originals are below.
Base metals prices have been highly volatile in 2026, with the LMEX hitting an all-time high in early June before plunging to a 3-month low after the collapse of the U.S.-Iran ceasefire deal triggered a surge in oil prices and stoked global inflation fears. Leveraged investors are increasingly selling assets to raise cash as they expect central banks to keep interest rates higher for longer. Commodity analysts at Standard Chartered say prices will take their cue from macro dynamics including Fed rate policy, U.S. dollar moves and China economic activity.
Copper Market Dynamics
LME copper prices have traded sideways in a $13,000-14,000/t range after testing the $14,000/t all-time high in May. Standard Chartered forecasts elevated prices in H2 due to U.S. copper tariff review uncertainty, inventory dislocations incentivizing inflows to the U.S., supply underperformance and recent China demand signals. China's Q2 GDP growth of 4.3% year-on-year fell below the 4.5-5.0% target, but supportive signals include declining SHFE copper inventories, a 4% rise in unwrought copper imports to 478 kt in June, and continued strength in the Yangshan copper import premium.
Supply and Demand Outlook
The International Energy Agency warns that short- and medium-term copper supply has 'worsened considerably' due to disruptions in sulphuric acid availability from the Iran war, geopolitical conflicts in the Middle East and slower mine recoveries. Even as supply stutters, copper demand surges from grid expansions, renewable energy transitions and skyrocketing power requirements from AI data centers. Aluminum prices have been driven by geopolitical headlines around the Middle East conflict, with the region accounting for 9% of global production.
What's Next
Standard Chartered expects prices to remain sensitive to macro shifts, including the Fed's next rate decision and China's policy response to its below-target growth. It remains unclear whether tariff reviews and supply disruptions will sustain the bullish case or if a broader economic slowdown will trigger further selloffs.
1 source
Metals selloff reshapes winners and losers amid tariff, rate uncertainty
