At the press conference on the 2025 economic performance of the nonferrous metals industry held by the China Nonferrous Metals Industry Association (CNMIA) on February 3, relevant officials of the association stated that major global nonferrous metal prices showed a notable upward trend in 2025, and the total profits of industrial enterprises above designated size in China’s nonferrous metals sector hit a record high. Looking ahead to 2026, the nonferrous metals market may see **structural divergence and intensified volatility**, with a potential further rise in the price center.Structural Divergence, Increased Volatility“In 2025, the total profits of nonferrous metals industrial enterprises above designated size surpassed the 500-billion-yuan mark, reaching 528.45 billion yuan, a year-on-year increase of 25.6%, setting a new record,” introduced Chen Xuesen, Member of the Standing Committee of the Party Committee and Vice President of CNMIA. By metal type, aluminum, gold and copper delivered outstanding performances in 2025, with profit increases of 38 billion yuan, 21.2 billion yuan and 17.7 billion yuan respectively. Lead & zinc, tungsten & molybdenum, and rare earths each recorded profit growth of more than 5 billion yuan. These six categories contributed 35%, 20%, 16%, 7%, 5% and 5% respectively to the profit growth of nonferrous metals enterprises above designated size. Lin Ruhai, Deputy Secretary-General of CNMIA and Director of the Policy Research Office (Planning Research Office), noted that the nonferrous metals market in 2026 is expected to feature an overall pattern of **structural divergence and intensified volatility**, with prices likely to move higher on average. From a macroeconomic perspective, the global interest rate-cutting cycle will continue to deepen. As China embarks on the 15th Five-Year Plan period, domestic policies are expected to remain supportive, and the environment of ample liquidity will persist, providing solid support for nonferrous metal prices. Safe-haven demand and continued gold reserve purchases by central banks worldwide will further underpin precious metal prices. In Lin’s view, rigid supply-side constraints are unlikely to ease. Global copper mine supply growth is expected to be limited in 2026; Indonesia will reduce nickel ore output; China’s primary aluminum capacity is nearing its policy ceiling; new overseas capacity expansion will be slow; and recycled metals can only partially fill the supply gap, leaving the tight supply-demand balance unchanged in the short term. Meanwhile, demand will maintain structural growth. These factors will provide strong support for nonferrous metal prices in 2026. Lin believes that if the international environment and consumption expectations remain stable, primary aluminum prices in 2026 are likely to continue fluctuating at high levels, supported by both supply constraints and the revaluation of strategic value. Dragged down by oversupply, alumina prices have retreated from highs and stayed low. Relevant Chinese authorities have imposed macro controls on new alumina capacity to curb blind investment. Supported by industrial policy constraints and production costs, high-cost alumina capacity may exit the market, leading to optimized industry structure. Regarding nickel, Duan Shaopu, Deputy Secretary-General of CNMIA, stated that if Indonesia strictly implements its nickel ore production reduction plan in 2026, global nickel feedstock supply will contract substantially, potentially reversing the current oversupply situation. On the demand side, driven by the expansion of new energy batteries, stainless steel and other industries, especially rising production and sales of electric vehicles, global nickel demand is projected to grow by around 5% annually, consolidating and expanding the foundation of market demand.Confronting Industry Challenges Including Carbon TariffsWhile celebrating record-high industry profits, the nonferrous metals sector also faces multiple challenges, one of which is the EU Carbon Border Adjustment Mechanism (CBAM), which officially took effect on January 1, 2026. Lin Ruhai pointed out that the CBAM will raise operating costs for nonferrous metals enterprises. Preliminary statistics show that China exported 750,000 tonnes of CBAM-covered aluminum products to the EU in 2025, with an estimated export value of approximately 3.451 billion US dollars (equivalent to 2.93 billion euros at current exchange rates). Based on the EU’s benchmark values, default emission factors for Chinese goods, and the current EU carbon price of 85 euros per tonne, the total CBAM cost is estimated at 244 million euros, or an average of 340 euros per tonne of aluminum products, representing an additional cost burden of 8.3%. Following the implementation of CBAM, compliance requirements for enterprises have become stricter. The EU has set relatively high default emission factors for enterprises unable to provide verified data — in some cases twice the actual emissions of Chinese aluminum producers — and will raise these levels annually over the next three years. Without a carbon data system compliant with EU standards, enterprises will be forced to bear high carbon costs. Under recent EU policy requirements, CBAM will cover an additional 180 steel and aluminum-intensive downstream products starting in 2028, including auto parts and machinery equipment, extending its scope from basic raw materials to the entire industrial chain. “European downstream enterprises have already made carbon emissions a mandatory procurement requirement. Some of China’s high-carbon products risk being excluded from EU supply chains. In the short term, shifting to other markets will also expose enterprises to new pressures such as logistics and channel constraints,” Lin said. Lin stated that the association strongly opposes green trade barriers. It will actively strive for fairer and more reasonable international trade rules and institutional arrangements, cooperate with relevant authorities in communication and consultations with the EU, and seek equivalence recognition for China’s carbon market system. The association will promote the introduction of more favorable measures for developing countries, build a product carbon footprint database, and guide and assist enterprises in strengthening their internal capabilities. [Data source: Compiled from public information]