North America Base Metals: 2Q Preview: N-T Aluminum Deficits and Copper S232 in Focus; L-T Copper Fundamentals Intact vs. Emerging Aluminum Surpluses; Prefer FCX

Research evidence excerpt

North America Base Metals: 2Q Preview: N-T Aluminum Deficits and Copper S232 in Focus; L-T Copper Fundamentals Intact vs. Emerging Aluminum Surpluses; Prefer FCX

J P M O R G A N North America Equity Research

09 July 2026

North America Base Metals

2Q Preview: N-T Aluminum Deficits and Copper S232 in

Focus; L-T Copper Fundamentals Intact vs. Emerging

Aluminum Surpluses; Prefer FCX

Since the onset of the Middle East conflict, our base metals coverage is -22% Metals & Mining

ACdespite both aluminum and copper tracking in-line with pre-war levels Bill Peterson

(BCOMIN -1%). For aluminum (unchanged since the start of the conflict), JPM (1-415) 315-6766

Commodity Research still forecasts a ~1Mt deficit in 2H26 alone, yet the opening of bill.peterson@jpmchase.com

the Strait has weighed on the FY27 strip (~$3,050/t) in anticipation of >2Mt of Bennett Moore

impacted ME production returning to the market along with new ramps in Indonesia. (1-212) 622-0188

Conversely, alumina (+8%) has found support as trade flows begin to normalize. On bennett.moore@jpmchase.com

copper (unch.), continued demand acceleration (i.e. Chinese consumers, datacenters/ Rock Hoffman

ESS) and structural deficits keep us constructive over the medium-to-long term, but (1-212) 259-5055

rock.hoffman@jpmchase.com

the near-term trajectory appears increasingly contingent on Section 232 (S232) and J.P. Morgan Securities LLC

Fed rate outcomes. While N-rated AA (-22%) is poised to generate significant FCF

in the back half, valuation looks fair (slightly below 5.0x on FY27 spot), we see risk

of lagged cost inflation, and investors continue to digest recent M&A. OW-rated FCX

(-16%) is well positioned to benefit from S232-driven COMEX premia and we