Industrial metals experienced a powerful rally on February 24, 2026, as Chinese markets reopened following the nine-day Lunar New Year holiday. Investors and commodity traders returned to their desks to find a significantly altered trade landscape, catalyzed by a landmark U.S. legal decision that promises to lower the cost of doing business between the world’s two largest economies. Copper and aluminum prices surged, reflecting a renewed optimism that the "period of peak uncertainty" regarding global trade barriers may finally be behind us.
The immediate implications of this rally are profound for the global manufacturing and energy sectors. As China—the world’s largest consumer of base metals—begins to ramp up production post-holiday, the sudden easing of trade tensions has created a supply-demand vacuum that is pushing prices toward historic highs. For the broader market, this serves as a critical signal that the inflationary pressures of the past year may be tempered by a more stable, albeit still complex, international trade framework.
The rally on February 24 was headlined by a 2.8% jump in benchmark copper on the London Metal Exchange (LME), with prices trading near $13,228 per metric ton. Aluminum followed suit, gaining nearly 1% to reach $3,118.50 per metric ton. The catalyst for this movement was a 6-3 decision by the U.S. Supreme Court on February 20 in the case of Learning Resources, Inc. v. Trump. The Court ruled that the International Emergency Economic Powers Act (IEEPA) of 1977 does not grant the President the authority to impose broad tariffs, effectively dismantling the "reciprocal duties" that had been a cornerstone of U.S. trade policy since early 2025.
In the wake of this ruling, Morgan Stanley (NYSE: MS) released a widely circulated analysis estimating that the average U.S. levy on Chinese goods would likely drop from 32% to approximately 24%. This eight-percentage-point reduction represents a massive easing of the financial burden on Chinese exporters and U.S. importers alike. While the administration has pivoted to using Section 122 of the Trade Act of 1974 to implement a temporary 15% global surcharge, the market viewed the shift away from the more aggressive IEEPA-based duties as a definitive victory for global trade stability.
The reaction in China was instantaneous. Upon reopening, the Yangshan copper premium—a vital barometer for Chinese import demand—skyrocketed by 60% to $53 a ton. This indicated that Chinese fabricators were not just returning to work, but were aggressively securing raw materials to capitalize on the lower-tariff environment. The timeline of the rally suggests that while the SCOTUS ruling occurred late last week, the full weight of its impact was only realized once the massive liquidity of the Chinese market returned to the fold on Tuesday.
The primary beneficiary of this rally is Freeport-McMoRan (NYSE: FCX), one of the world’s largest publicly traded copper producers. Shares of the company rose over 3% in early trading as investors bet on higher realized prices for its massive output from mines in Indonesia and the Americas. Similarly, Southern Copper Corporation (NYSE: SCCO) saw a significant uptick, as its low-cost production profile makes it uniquely positioned to capture high margins during price spikes. These companies are now facing a market where demand for copper—essential for the global energy transition—is being met with a suddenly more favorable regulatory environment.
In the aluminum sector, Alcoa Corporation (NYSE: AA) and Century Aluminum (NASDAQ: CENX) are navigating a more complex landscape. While higher aluminum prices generally help their bottom line, the reduction in U.S. tariffs on Chinese imports could increase competition from overseas primary aluminum. However, Century Aluminum remains a focal point for investors following its announcement to move forward with a new 750,000-ton smelter in Oklahoma, the first of its kind in the U.S. in decades. The company’s strategic shift toward domestic, high-tech smelting may insulate it from the worst effects of increased import volumes.
On the losing side, domestic manufacturers who relied on the high "reciprocal duties" as a shield against foreign competition may find their margins squeezed. Conversely, the "big three" diversified miners—BHP Group (NYSE: BHP), Rio Tinto (NYSE: RIO), and Glencore (LSE: GLEN)—stand to gain immensely. Rio Tinto, in particular, has been the subject of intense market speculation regarding a potential takeover bid for Glencore in early 2026. A successful merger would create a gargantuan entity with unprecedented control over the global copper and zinc supply chains, further consolidating power in a high-price environment.
This event fits into a broader industry trend of "rationalizing" the trade wars of the mid-2020s. After years of escalating duties and supply chain fragmentation, the SCOTUS ruling forces a return to more traditional trade mechanisms. The shift from IEEPA to Section 122 of the Trade Act of 1974 is significant because Section 122 surcharges are limited to 150 days unless extended by Congress. This creates a predictable, albeit temporary, window for trade, allowing companies to plan their inventory and capital expenditures with greater clarity than the previous era of "tariff by tweet" or executive order.
The ripple effects are already being felt among U.S. trading partners. The weighted average tariff for Asian exports to the U.S. is projected by analysts to drop from 20% to 17%, easing the pressure on regional allies like Vietnam and South Korea who had been caught in the crossfire of U.S.-China tensions. Historically, such a sudden shift in trade policy mirrors the post-GATT (General Agreement on Tariffs and Trade) eras, where legal clarifications often led to short-term commodity booms as markets adjusted to new cost structures.
Regulatory implications are also surfacing. The ruling effectively curtails the use of emergency powers for economic protectionism, shifting the responsibility for trade policy back toward the legislative branch and specific trade statutes. This could lead to a more deliberative, and perhaps slower, process for future tariff implementations. For the base metals market, this means that the "geopolitical premium" often baked into prices may begin to erode, replaced by a focus on fundamental supply and demand dynamics.
Looking ahead, the short-term focus will be on the 150-day window of the 15% surcharge. Traders will be watching closely to see if the U.S. Congress moves to extend these duties or if a more permanent trade agreement can be reached before the expiration. If Congress fails to act, we could see an even more dramatic drop in tariffs by mid-summer, which would likely provide a second leg to the current metals rally. However, any sign of renewed legislative aggression could quickly stall the market's momentum.
Strategically, major miners like BHP Group (NYSE: BHP) may pivot their investment focus back toward large-scale expansion projects that were previously deemed too risky under high-tariff regimes. We may see a flurry of Final Investment Decisions (FIDs) on copper projects in South America and Africa in the coming months. The challenge for these companies will be managing the volatility that comes with a transition period; while the SCOTUS ruling is a tailwind, the underlying global economy is still grappling with high interest rates and a slowing manufacturing sector in Europe.
In the long term, the market will monitor whether China uses this tariff relief to flood the global market with excess capacity or if it will maintain its recent focus on environmental curbs and value-added exports. A surge in Chinese exports could trigger "anti-dumping" investigations, leading to a new cycle of targeted trade disputes. For now, the scenario remains optimistic, with a "soft landing" for trade relations appearing more likely than it did at the start of the year.
The February 24 rally marks a pivotal moment in the 2026 financial calendar. By combining the seasonal demand of a post-Lunar New Year China with a transformative legal ruling in the U.S., the base metals market has signaled a clear departure from the high-friction trade environment of the past year. With Morgan Stanley’s projected tariff drop from 32% to 24%, the cost of industrial development has effectively been lowered on a global scale, providing much-needed oxygen to the construction and green energy sectors.
Moving forward, the market appears to be entering a phase of "guarded bullishness." Investors should watch for the Biden administration's next moves in Congress and keep a close eye on the inventory levels at the LME and Shanghai Futures Exchange (ShFE). If inventories remain low while demand from a "reopened" China climbs, the $13,228 copper price seen this week might only be the beginning of a larger ascent.
The lasting impact of this week’s events will be the re-assertion of legal limits on trade policy. As the dust settles on the SCOTUS decision, the mining and metals industry finds itself in a rare sweet spot: lower trade barriers, robust demand for the energy transition, and a clear set of rules for the road ahead. For the savvy investor, the coming months will be defined by identifying which producers can most efficiently scale their output to meet this newly liberated global demand.
This content is intended for informational purposes only and is not financial advice.
