JPM | Alcoa lowers Alumina guide, SoH Latest Thoughts, BASF big guide miss, Regis down 10% and Stay constructive chinese/ Nickel miners

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JPM | Alcoa lowers Alumina guide, SoH Latest Thoughts, BASF big guide miss, Regis down 10% and Stay constructive chinese/ Nickel miners

Specialist Sales

APAC Specialist Sales J P M O R G A N

17 July 2026

BASE METALS: While market awaits tariff update, china keeps buying copper (Greg Shearer Note)

• Copper fundamentals are getting masked by policy: China’s consumption-weighted end-use indicator is now down to -5%

yoy YTD through 5M26, yet apparent demand is still up 8% yoy in May (about +3% yoy YTD) on resilient output and

inventory draws. With SHFE+bonded stocks now sub 140 kmt and China spot premiums pushing toward $95/mt, LME

cancellations are up more than 65 kmt this week, pulling on-warrant LME inventory down to around 130 kmt—conditions

that can force sharp backwardation.

• Key driver: Section 232 copper tariff review—communication and expectations around escalation are “the flip point” for

LME direction in 2H26, more so than near-term balances. An escalatory regime (their base case) keeps the US import arb

open and incentivizes pre-tariff buying (bullish pull on metal and higher pinch risk as ex-US stocks shrink), while a non-

escalatory message likely closes the arb and triggers a longer US de-stocking phase (bearish for LME).

• Aluminum supply is starting to normalize, but the market still needs China inventories: EGA restarted its alumina refinery

(about 50% of its needs) and is progressing at Al Taweelah, with frozen metal removed from over 20% of cells and about 7%

restarted, though ramp to pre-incident levels could take up to a year. China visible inventories have drawn about 320 kmt

since end-May to around 1 mmt, but the semis export arb has closed again with LME back near $3,150/mt—raising the risk