BMO Metals Brief

Research evidence excerpt

BMO Metals Brief

June 18, 2026

Global Commodities

BMO Metals Brief Global Commodities

Helen Amos Analyst

helen.amos@bmo.com +44 (0)20 7664 8180

 Aluminium's Elastic Supply Undermines Big Dreams. In our new report on aluminium, we take a

bearish stance on aluminium, with supply disruptions from the Iran conflict now passed the peak George Heppel Analyst

pain-point and China's offshore capacity ramp-up gathering momentum. Prices had already george.heppel@bmo.com +44 (0)20 7664 8106

started to lose steam even before Sunday’s US-Iran deal announcement, with recovering

Alona Yunda Senior Associate utilisation rates in the Middle East and a supply response from Asia capping prices before they

could get to demand destruction levels. This "elastic supply" behaviour is ultimately what has alona.yunda@bmo.com +44 (0)20 7664 8122

kept previous major forays away from the cost curve relatively brief. While tightening electricity Walid Hasanzadeh Associate

markets in aggregate may push aluminium cost curves higher, this is unlikely to create sufficient walid.hasanzadeh@bmo.com +44 (0)20 7872 1565

entry barriers given most new aluminium capacity comes with captive power. With China's

offshore capacity ramping quickly and entering in the low end of the cost curve, we think Legal Entity: BMO Capital Markets Limited

aluminium prices will now underperform copper again, trending back sustainably above 4:1 even

if the pathway to full Strait reopening is prolonged. LME Index (LMEX)

6,100

 Hawkish FOMC meeting. As expected, the FOMC left policy rates unchanged (target fed funds 6,000

range 3.50%-3.75%), marking the fourth consecutive pause, supported unanimously. Previous 5,900

language in the statement that was construed as an “easing bias” was removed, also as 5,800

5,700

expected.