As global demand growth slows, prices for aluminum remain at or below the cost of production and are forecast to rise as production cuts tighten supply over the second half of the year.

In contrast, copper and nickel prices are both significantly above the cost of production and face a growing surplus that will pressure prices lower over the second half of the year.

Falling physical delivery premiums across US point to better supply conditions for nonferrous metals in the third quarter as growth in supply outpaces growth in demand. While low visible inventories and optimism over potential stimulus in mainland China have provided support to some exchange-traded nonferrous metals in recent months, downstream demand and overall buying activity has continued to slow and will face ongoing headwinds through the end of the year, especially in mainland China absent more large-scale stimulus for the ailing property sector. Rising demand from the green energy transition will not be sufficient to offset slowing demand in the traditional consuming sectors for the next several years. While strong demand supported elevated prices throughout the past several years, supply side developments are now key to the future outlook.