The Price Deck – 3Q26: Micro Narratives, But Macro Matters

Research evidence excerpt

The Price Deck – 3Q26: Micro Narratives, But Macro Matters

nd maintain market surplus, limiting upside

10 Lead

despite a tight concentrate market and risks to primary output.

11 Nickel Potential new mining quotas in Indonesia cap upside, but other supply challenges remain.

Alumina sees a tighter balance than before on stronger aluminium output, while potential Guinea

12 Alumina

bauxite restrictions bring cost pressures. However, surplus remains.

Demand remains healthy but supply is responding to high prices with restarts in Australia and

13 Lithium Carbonate shipments resuming in Zimbabwe. The restart timing of CATL's lepidolite mine remains the key

unknown.

With speculative activity at much lower levels, the risk reward has improved dramatically. We may still

14 Platinum

see OEM metal buying fall in 2H, but in the medium-term the metal remains in fundamental deficit.

15 Hard Coking Coal We see modest downside to Met coal with weaker Chinese seaborne demand and recovering supply.

High inventories levels have driven a price correction which now sees marginal cost production turning

16 Palladium

cashflow negative. We think prices need to remain depressed in 2H to trigger supply cuts.

Middle East disruptions are reversing more quickly, while Chinese-led supply growth elsewhere is

17 Aluminium

accelerating, pushing aluminium into surplus in 2027 and weighing on prices.

Iron ore is shifting to oversupply on stronger seaborne supply and softer Chinese demand, while cost

18 Iron ore

support should also be reversing.

Note: Commodities ranked 1 = most preferred to 18 = least preferred. Ranking based on average of 4Q26 vs last two weeks' average prices. For

ranking vs spot, please see Exhibit 4 . Source: Morgan Stanley Research

Morgan Stanley Research 3