From safe havens to super cycles: LME Asia week 2026

Against a backdrop of geopolitical tension, shifting capital flows and increasingly fragile supply chains, our conversations at LME Asia Week in Hong Kong this month highlighted the themes that are reshaping metals markets over both the short and longer term.

De‑fiatisation, re‑globalisation, market dislocation and the fundamental outlook for aluminium, copper and gold were in focus during discussions with clients and industry participants.

While the geopolitical situation is changing by the day, we remain convinced that structural changes are under way. Here are our takeaways from the must-attend annual gathering for Asia’s metals markets:

De‑fiatisation and the repricing of metals

Concerns around the long‑term stability of major currencies, with the Swiss franc a notable exception, are broadening safe‑haven demand. Historically, this has seen a flight to gold, however this is changing, and investors are increasingly looking to diversify into other metals for much the same rationale. Silver was the big beneficiary earlier this year, but base metals are also benefiting.

Because these markets are far smaller than those for equities or bonds, even modest reallocations can generate disproportionate price swings. Silver’s extreme intraday volatility earlier this year underscored how sensitive the market has become to shifts in global capital allocation.

When we talk about a new super-cycle across metals markets, de-fiatisation is one of the key driving factors.

Re‑globalisation and the rewiring of supply chains

A series of massive shocks in quick succession have rocked global markets: COVID-19; the Russia-Ukraine conflict; the threat of new tariff regimes from the Trump administration; and now the war in the Middle East.

Those dislocations have also impacted supply chains. Producers and producer nations have realised they can’t depend on one customer, while consumers are questioning their reliance on any one source of supply.

In recent years, India has signed at least nine free trade agreements spanning 38 countries, while Canada has employed a similar strategy in response to trade tensions with its southern neighbour.

Ultimately, these shifts will improve resilience, but markets will remain volatile during the transition.

Aluminium: tightness, sensitivity and a potential super‑cycle

Of all of the base metals, aluminium has demonstrated the greatest sensitivity to the situation in the Middle East.

Inventories were already tight before the damage to the Emirates Global Aluminium and Aluminium Bahrain smelters, and shipments from other countries in the region remain disrupted. The Gulf is home to almost a tenth of global supply, which is already being artificially constrained by China’s export quotas.

Even if a ceasefire in the Gulf is successfully agreed, the damage to those smelters is unlikely to be fixed quickly, and markets are much more fixated on supply disruption than the demand destruction that could result from a prolonged global economic slowdown.

Near‑term demand remains strong – and supply is so constrained that prices for immediate delivery trade above prices for future delivery. Given these dynamics, 2026 is shaping up to be the year of the Great Backwardation in aluminium.

Copper: a strategic asset in a fragmenting world

Copper’s role continues to expand, thanks to accelerating electrification, grid reinforcement and the build-out of AI‑driven infrastructure.

With governments stockpiling the red metal and supply chains in flux, copper is increasingly treated as a strategic asset rather than a cyclical industrial metal.

While near‑term price forecasting remains difficult, particularly with fast‑moving developments in the Middle East, the structural drivers remain firmly in place, and we are likely to see prices break through the records we saw earlier this year.

Gold: still a haven, but no longer the only one

Gold continues to benefit from currency debasement concerns and geopolitical uncertainty. However, the broader shift in safe‑haven demand means it no longer absorbs these flows alone, and other metals are also increasingly in favour. Capital is diversifying across the metals complex, amplifying volatility and deepening liquidity challenges.

Many commentators are questioning why the conflict in the Middle East hasn’t driven prices beyond the records we saw in January, however all bull markets are subject to corrections and gold is no different. The underlying themes are all still there – and so is the bullish trend for gold.

A market defined by dislocation

The situation in the Middle East took multiple twists and turns through the week as various ceasefire proposals were broached and then rejected, illustrating how quickly fundamentals can shift. Volatility is now embedded across the metals complex.

While forecasting remains challenging, the direction of travel remains clear, and a combination of de‑fiatisation, re‑globalisation and infrastructure‑driven demand suggests that a new metals super‑cycle may be emerging.