Key Takeaways
- Zinc and tin have the most constructive supply-demand setups for H2 2026 among base metals.
- Nickel faces persistent headwinds from Indonesian oversupply; recovery likely deferred to 2027.
- Aluminum has positive demand momentum (EVs, aerospace) but faces energy cost headwinds in Europe.
- Chinese fiscal stimulus remains the key swing factor for all base metals in the second half.
The base metals complex in H2 2026 presents a highly differentiated picture one where blanket bullishness or bearishness about “industrial metals” misses the point entirely. Each metal is driven by its own supply-demand dynamics, and the divergence between the best and worst performers is likely to widen in the second half of the year. Here is our metal-by-metal assessment.
Zinc: Most Constructive Base Metal
Zinc enters H2 2026 with the most compelling supply-demand setup of any base metal. LME stocks are near multi-year lows, the mine supply shortfall is widening, and demand from galvanised steel used in automotive and construction applications is holding up better than feared despite slowing Chinese construction. Our H2 target is US$3,000–3,200/t, with the bull case at US$3,500/t if European smelter restarts remain delayed.
Tin: Structurally Undersupplied
Tin’s semiconductor demand story is genuine and underappreciated. Myanmar supply disruptions and Indonesian permitting constraints are real. LME tin at US$32,500/t is up 18% year-to-date and we see further upside to US$35,000–38,000/t in H2 as advanced packaging demand from the AI semiconductor cycle continues to accelerate. Alphamin Resources remains our preferred way to play this theme from the TSX-V.
Aluminum: Neutral to Mildly Constructive
Aluminum’s supply-demand balance is approximately neutral in H2. New capacity from the Middle East (UAE and Bahrain) is coming online, but tariff dynamics in North America create a local premium that benefits Canadian producers. Our range is US$2,400–2,600/t for H2. The green premium story for low-carbon aluminum is real but will take time to fully monetise.
Lead: Quietly Constructive
Lead’s durable demand from lead-acid batteries supported by data centre UPS growth and the physical market tightness driven by limited primary mine supply should sustain prices in the US$2,100–2,300/t range. No dramatic upside catalyst, but the downside is well-protected by the secondary market recycling base.
Nickel: Most Challenging Outlook
Nickel remains the most difficult call. The Indonesian supply machine shows no signs of throttling back, and while sulphide-vs-laterite differentiation is real, it hasn’t yet moved LME prices meaningfully. Our base case for H2 is a range of US$15,500–17,500/t essentially range-bound, with the risk skewed to the downside if Chinese stainless steel demand disappoints. The long-term bull case (2028+) remains intact for high-quality sulphide producers, but patience is required.
| Metal | Current Price | H2 2026 Range | Direction | Top Canadian Play |
|---|---|---|---|---|
| Zinc | US$2,841/t | $3,000–$3,200/t | ↑ Bullish | Teck Resources (TECK.B) |
| Tin | US$32,500/t | $35,000–$38,000/t | ↑ Bullish | Alphamin Resources (AFM) |
| Aluminum | US$2,490/t | $2,400–$2,600/t | → Neutral | Rio Tinto (RIO) Quebec ops |
| Lead | US$2,180/t | $2,100–$2,300/t | → Neutral | Teck Resources (by-product) |
| Nickel | US$16,420/t | $15,500–$17,500/t | ↓ Cautious | Canada Nickel (CNC speculative) |