Base Metals Forecast: Copper Bullish Bias on EV, Renewable Demand; Aluminium Neutral on Growth Concerns

Global base metal markets are navigating a phase of cautious optimism as investors weigh structural demand themes against macroeconomic uncertainty. Copper and aluminium prices are expected to remain supported in the near to medium term, although investors should prepare for bouts of macro-driven volatility, according to Ross Maxwell, Global Strategy Operations Lead at VT Markets.

Copper Price Outlook: Structural Demand from Electrification, EVs and Renewables

Maxwell believes copper holds relatively stronger structural backing compared to aluminium, driven by long-term electrification themes. "Copper has more obvious structural support with demand through electrification, grid investment, EVs and renewables," he said. The global push toward electric vehicles, renewable energy infrastructure and power grid upgrades continues to underpin copper demand across major economies.

At the same time, supply-side constraints are reinforcing the bullish undertone in copper. Maxwell pointed to declining ore grades and limited new mine development as key challenges. "Declining ore grades and limited new mines limit supply in the medium term," he noted, suggesting that producers may struggle to ramp up output quickly even if prices rise.

Copper Price Risks: China Growth, US and Europe Manufacturing Slowdown

However, he cautioned that near-term risks remain. China's property and industrial momentum, along with manufacturing trends in the United States and Europe, could sway price direction. "If global growth concerns present themselves, they could push prices down temporarily," Maxwell said, highlighting the sensitivity of base metals to broader economic signals.

Aluminium Price Forecast: Cyclical Trends and Power Costs in Focus

In contrast, aluminium is expected to trade in a more neutral range, with price movements closely tracking the economic cycle and production costs. Maxwell explained that aluminium demand is broad-based, spanning construction, transport, packaging and consumer goods. Yet its supply dynamics are heavily influenced by electricity costs and policy decisions.

"Aluminium tends to move more closely with the economic cycle and is more strongly influenced by production costs," he said. Because aluminium smelting is highly energy-intensive, shifts in electricity tariffs, government interventions and geopolitical disruptions can have an outsized impact on output.

Energy Prices, Alumina Supply and Scrap Flows to Drive Aluminium Prices

Energy shocks, disruptions in alumina and bauxite supply, or logistics bottlenecks typically boost aluminium prices. On the other hand, prolonged periods of cheap power and capacity expansions can keep prices subdued. Maxwell also highlighted another limiting factor: higher scrap flows and material substitution during economic slowdowns can cap upside potential.

Copper and Aluminium Prices: Range-Bound Trading with Volatility Spikes

Maxwell expects both metals to trade within broad ranges rather than follow a straight upward trajectory. Short-term volatility spikes are likely around China's stimulus announcements, shifts in interest-rate expectations, foreign exchange movements, energy price fluctuations and inventory data releases.

"I expect range-bound trading with some short-term volatility spikes," he said. While he maintains a modestly bullish bias on copper due to structural demand and constrained supply, his stance on aluminium is neutral to slightly positive, reflecting its cyclical nature and sensitivity to macro condition.

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