Metals are projected to outperform in 2026, with ING's latest report forecasting significant deficits for copper and aluminium amid tight supply and strong demand. Conversely, nickel supply will remain in surplus and iron ore prices are set to fall.
Metals are expected to outperform in 2026, driven by tight supply and strong demand, according to ING's Commodities Outlook 2026. The report adds that copper is expected to be in deficit due to high demand and disruptions at Grasberg (Indonesia), flooding at the Kamoa-Kakula mine (DRC), and an accident at the El Teniente mine (Chile), and distortions to trade flows amid US President Trump's tariffs. "Our refined copper balance for 2026 is now showing a deficit of around 600kt for 2026, following a deficit of around 200kt in 2025", the report stated.
Aluminium Market to Remain in Deficit
The global aluminium market too is expected to remain in a deficit through 2026, driven by China's self-imposed 45 million tonne capacity cap and power constraints outside the country limiting supply growth. China's output rose from 12.6 million tonnes in 2007 to almost 45 million tonnes today. "We expect the global market to be in a deficit of around 200kt in 2026, following a 2035 deficit of around 100kt. This assumes Century's Iceland 12-month outage and China's capacity cap will hold at 45 million tonnes. If Mozal shuts down, that deficit will increase to around 600kt.", the report said.
Global Nickel Supply to Stay in Surplus
The report, however, says that global nickel supply is expected to remain in surplus through 2026, primarily driven by Indonesian production, which accounts for 60% of global output. Indonesia's nickel industry is expanding, but faces increasing scrutiny over environmental concerns. The government is tightening regulations, including stricter permit enforcement and quotas, which could impact supply. Furthermore, on the demand side, stainless steel consumption remains sluggish, while battery demand growth is slowing as EV makers increasingly shift toward cheaper, nickel-free LFP chemistries, especially in China.
Iron Ore Prices Expected to Decline
The report says, Iron ore prices are expected to decline in 2026 due to rising seaborne supply, particularly from Guinea's Simandou project, and easing demand from China's traditional growth engines. "The mine is expected to send around 20 million tonnes of iron ore in 2026, with full capacity of 120 million tonnes per year expected by 2030," the report added. China's steel consumption is slowing down, while global seaborne iron ore supply is expected to continue growing, with Australia and Brazil set to increase shipments. "Iron ore prices are likely to drift lower over the next year. Rising seaborne supply, persistent Chinese property sector weakness, and elevated inventories all point toward a weakness in prices in 2026. Inventory risk, especially port stocks in China, could act as a cap on the upside." the report said.
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