Base metals are having a standout year. Copper, zinc and aluminum have all delivered strong, albeit volatile, gains, helping drive compelling year-to-date performance for the S&P/TSX Global Base Metals Index.

Geopolitical tensions and shifting macroeconomic conditions are influencing prices in the near term, but the longer-term story may be even more important. Artificial intelligence, data centre expansion, grid investment and electrification are creating new sources of demand for many of these critical industrial metals.

For investors, that combination of constrained supply, rising strategic importance and structural demand is putting base metals, and the ETFs that provide exposure to them, firmly back in the spotlight.

What Is Driving Base Metals Higher?

Base metals sit at the foundation of the modern economy, powering everything from construction and manufacturing to transportation, energy infrastructure and technology. Their importance is not new, but two powerful structural themes are adding fresh demand: electrification and artificial intelligence.

Prices remain highly sensitive to shifts in supply and demand, and recent gains have been shaped by a mix of geopolitical disruption, production constraints and changing global manufacturing trends. China also remains a critical part of the equation given its dominant role in metals processing and refining, as well as its use of export controls across strategically important materials.

At the same time, longer-term demand continues to build. Renewable energy projects require large quantities of industrial metals, power grids need significant upgrades, and the rapid expansion of AI infrastructure is driving investment in data centres and the electricity networks that support them. Together, these forces are reinforcing demand for copper, aluminum, zinc and other key base metals.

Copper, Aluminum and Zinc Push Higher

The rally has been broad-based. Copper has reached new nominal highs in 2026, while aluminum and zinc have climbed to multi-year peaks.

Copper: Copper has been one of the standout performers. Geopolitical tensions, including disruption linked to the U.S.-Iran conflict and the Strait of Hormuz, added to concerns around key inputs used in copper processing. Those supply worries helped push copper to a record of roughly $14,527 per metric ton around mid-year.

The broader rally has also been supported by tight refined supply, resilient demand from electrification and grid infrastructure, and changing expectations around U.S. tariff policy. After breaking above previous highs during the first half of the year, copper has since moved into a period of consolidation.

Aluminum: Aluminum has also climbed sharply, recently reaching a three-year high near $2,900 per tonne. Geopolitical tensions have increased concerns around supply availability, particularly for metals exposed to energy-intensive production and global trade routes. Those supply risks have, at times, outweighed concerns that weaker economic growth could dampen demand.

Zinc: Zinc has emerged as another strong performer, reaching a four-year high. The metal has benefited from historically low inventories on the London Metal Exchange and tightening market conditions. Alongside copper, zinc has continued to strengthen despite a less supportive broader macroeconomic backdrop.

How ETFs Can Provide Base Metals Exposure

For investors looking to gain exposure to the commodities supporting electrification, infrastructure and industrial growth, ETFs can offer a more accessible route than investing directly in physical metals or individual mining companies.

The Global X Copper Producers Index ETF (COPP) seeks to track the Solactive North American Listed Copper Producers Index. The fund provides exposure to companies involved in copper mining and production that are listed on selected North American exchanges.

The iShares S&P/TSX Global Base Metals Index ETF (XBM) seeks to track the S&P/TSX Global Base Metals Index, providing exposure to global companies involved in the production and extraction of base metals.

Both approaches provide equity-based exposure to the base metals theme, although their underlying holdings, commodity sensitivities and portfolio construction differ. For investors, that makes understanding the source of exposure just as important as the broader metals outlook.

As shown in the illustrations above, the dynamic nature of commodities can result in a volatile investment experience; as such, investors should be mindful of how this exposure will aid or impact their portfolio objectives.

This article was written on September 3rd, 2026. Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.