Why is LME Aluminum Outperforming LME Copper In March 2026?

Copper prices rose to a new all-time high in 2026, with the COMEX rising to $6.5830 and the LME three-month forwards reaching $14,527.50 per metric ton in late January. While copper prices have corrected from the late January highs, LME high-grade three-month aluminum forwards have done better and could be heading for a new record high as aluminum has taken the bullish baton from copper. 

Copper has corrected from its late January high

LME copper three-month forwards reached a record high of $14,527.50 per metric ton in late January 2026 before correcting. 

The monthly chart shows that copper forwards corrected 19.1% to a $11,754.00 per ton low in March and were around the $11,930 level in on March 20, closer to the February low than the late January high. 

Aluminum prices have outperformed copper

While copper prices have moved lower since late January, three-month high-grade aluminum forwards have done better. 

The chart shows that aluminum prices have soared, reaching the highest level since March 2022 when they rallied to a record $4,073.50 per ton high. The most recent rally took the aluminum forwards to $3,546.50. At $3,215 per ton, aluminum is just above the midpoint of the 2026 high and early February low of $2,979.50.

The war in the Middle East has pushed aluminum prices higher

The top ten aluminum-producing countries in 2025 were as follows:

 The chart shows that the UAE and Bahrain together accounted for 6% of the world’s annual primary aluminum production. Moreover, the UAE has modern, export-focused smelters, and Bahrain was a major regional player in the aluminum market, with high utilization rates. Meanwhile, the UAE is the third-largest aluminum exporter. 

On February 28, 2026, the U.S. and Israel attacked Iran. Iran retaliated with drone and missile attacks on its neighbors hosting U.S. military bases. The UAE and Bahrain have been targets of Iran, igniting a bullish fuse in the aluminum market and driving prices to the highest level in four years.

Aluminum’s upside target is the March 2022 high

Russia is the third-leading aluminum-producing country. In March 2022, when Russia invaded Ukraine, aluminum prices soared to a record high of $4,073.50 per metric ton, eclipsing the July 2008 high of $3,380.20 per metric ton.  

With aluminum prices recently moving above the 2008 peak at the most recent high, the upside target is the 2022 high. Aluminum’s path of least resistance remains bullish in late March 2026, but the price action over the coming weeks and months will depend on the war with Iran. Meanwhile, aside from missile and drone attacks impacting production facilities, exports from the UAE and Bahrain depend on passage through the Strait of Hormuz, the critical chokepoint for crude oil and other commodities, including aluminum. 

According to a March 5, 2026, Financial Times article, “The war in Iran has caused smelter closures and ‘force majeure’ declarations across the aluminum industry in the Middle East, threatening a supply crunch in the key industrial metal with global stocks already close to historic lows.” Aluminum smelter production depends on gas supplies. The attacks have caused Qatar Energy to stop gas supplies to regional smelters. After sitting at several million tons over the past years, LME aluminum inventories had declined to 432,725 metric tons as of March 20, 2026. 

The DBB ETF has aluminum exposure 

The war with Iran and its regional retaliation will continue to impact global aluminum prices. The Invesco DB Base Metals Fund (DBB) owns a portfolio of LME base metals. At $22.34 per share, DBB has over $259 million in assets under management. DBB trades an average of over 537,000 shares per day and charges a 0.74% management fee. DBB’s most recent holdings include:

While DBB’s leading exposure is to copper prices, with a 24.58% allocation to LME copper and a 22.89% allocation to COMEX copper futures, LME primary aluminum accounts for 30.97% of the ETF’s exposure. 

Copper is typically the leading base metal. While copper’s price has corrected from the most recent late-January 2026 high, the red base metal remains in a bullish trend. Aluminum is outperforming copper since the bombing in the Middle East began, reflecting supply concerns from the region. Expect lots of volatility in the aluminum market over the coming days and weeks as the war progresses. DBB’s over 78% exposure to copper and aluminum should continue to do well in 2026 for the following reasons:

• If the war ends, economic growth should support higher copper prices.
• If the war continues, aluminum prices could keep soaring as supply concerns grow.
• The trend in DBB remains bullish since the 2020 low. 

After falling to an $11.91 per share low in March 2020, DBB’s price reached a $27.01 high in March 2022, following Russia's invasion of Ukraine and a rise in aluminum prices to a record high. After consolidating between $17 and $22 per share from 2022 through 2025, DBB has made higher lows and higher highs since April 2025. At $22.34 per share, the upside target is the 2022 record high of $27.01. 

While aluminum has the base-metal bullish baton in March 2024, a continuation of the war could keep the current trend intact. However, an end to the war could hand the baton to copper, which is also likely bullish for the DBB ETF.  One threat is a global recession that drives commodity prices down. I rate DBB a hold in the current environment.