The Commodity Markets Outlook in eight charts

🔸🔸🔸   Commodity Markets Outlook, October 2025  🔸🔸🔸

Global commodity prices are projected to decline by about 7 percent in 2026, marking the fourth consecutive year of moderation. The continued weakness reflects subdued global economic activity, persistent trade tensions and policy uncertainty, and ample oil supplies. Energy prices are expected to fall by 10 percent in 2026 (y/y), following a projected 12 percent decline in 2025. Metals and minerals prices are anticipated to remain broadly stable, while agricultural prices are projected to edge lower amid favorable supply conditions. In contrast, precious metals prices are forecast to rise by 5 percent in 2026, extending gains after a historically large, investment-driven surge of more than 40 percent in 2025.

Over the past six months, commodity markets have been pressured by subdued economic activity, trade restrictions, policy uncertainty, and weather-related supply shocks. Brent oil dropped 14 percent in the first nine months of 2025 amid oversupply and weak demand, particularly in China—though U.S. sanctions on Russian oil caused brief price spikes. Natural gas prices surged on strong European LNG demand, while base metals rebounded in 2025Q3 amid resilient global demand, shifting trade policies, and supply disruptions, especially in copper. Precious metals continued their rally, with gold and silver hitting record highs fueled by robust investment demand, central bank purchases, and heightened geopolitical uncertainty. Meanwhile, food commodity prices fell for a third consecutive quarter on ample grain supplies, while fertilizer costs soared due to strong demand, trade restrictions, and production shortfalls.

Oil prices have trended lower throughout 2025. Oil prices have been subjected to downward pressures by trade policy tensions and concerns over excess supply, though occasional spikes occurred in response to geopolitical developments. Since April, OPEC+ has gradually increased production targets through monthly decisions, contributing to a roughly 3 mb/d (y/y) rise in global supply this year. Supply is expected to continue growing in 2026, while demand remains sluggish, expanding by less than 1 mb/d in both years. With demand lagging behind supply, the oil market is likely to face a sizable surplus. Brent crude prices are projected to average $68/bbl in 2025—a $13 decline from 2024—and to fall further to around $60/bbl in 2026.

Natural gas prices eased from earlier spikes, though with notable regional differences. The World Bank Group’s natural gas price index declined slightly in October, extending a 5 percent (q/q) drop in 2025Q3 as prices normalized following the sharp rise earlier in the year. In recent months, U.S. and European benchmark prices have diverged significantly. Compared with a year earlier, U.S. benchmark prices were 44 percent higher in 2025Q3, driven by strong LNG demand, while the European benchmark remained largely unchanged. The early-year surge reflected a combination of weather-related reductions in European renewable generation and colder-than-normal temperatures in North America. Looking ahead, natural gas prices are expected to follow different trajectories across the United States, Europe, and Asia. After a 60 percent estimated y/y increase in 2025, the U.S. benchmark is projected to rise by 11 percent in 2026 and stabilize in 2027, supported by higher LNG exports. Meanwhile, the European benchmark, having risen an estimated 10 percent in 2025, is expected to decline by 11 percent in 2026 and 9 percent in 2027 due to moderate demand and greater LNG import availability.

Agricultural prices are easing amid favorable supply conditions. The World Bank Group’s agricultural commodity price index fell in October as seasonal harvests in the Northern Hemisphere and ample grain and beverage supplies weighed on markets. The index had already dropped 4 percent in 2025Q3 (q/q), marking its second consecutive quarterly decline, supported by improved weather in cocoa- and coffee-growing regions and a strong grain supply. The agricultural price index is expected to remain stable in 2025 before edging down 2 percent in 2026. Food and raw material prices are projected to stay largely unchanged in 2026 as supply growth keeps pace with demand, while beverage prices are expected to fall 7 percent next year due to expanding output. Risks to the forecast are broadly balanced: extreme weather, easing trade tensions on key commodities like U.S. soybeans, and higher input costs (e.g., natural gas for fertilizers) could push prices up, while weaker biofuel demand and slower global growth could weigh on them.

Fertilizer prices surged amid strong demand and trade constraints. The World Bank Group’s fertilizer price index rose nearly 14 percent quarter-on-quarter—the fifth consecutive quarterly increase—standing 28 percent above its level a year earlier. Urea, TSP (triple superphosphate), and DAP (diammonium phosphate) all posted sharp gains, while MOP (muriate of potash) edged slightly lower after strong increases in the previous two quarters. The overall rise reflects robust demand, trade restrictions, and production shortfalls, particularly for urea. The fertilizer price index is projected to climb 21 percent in 2025 before easing in 2026 and 2027, though remaining well above the 2015–19 average. Prices are expected to stay elevated due to higher input costs—especially nitrogen—resilient consumption, and trade restrictions and sanctions affecting producers. Key risks include further increases in input costs on the upside and higher exports from China on the downside.

Base metal prices climbed higher amid firm global metal demand. Base metal prices continued their upward trend in October, building on a 4 percent rise in 2025Q3 (q/q), supported by resilient activity in major economies. Strong investment in renewable energy and associated infrastructure—particularly in China—boosted demand for aluminum, copper, and tin. At the same time, weakness in China’s property sector continues to dampen demand for construction-related metals such as iron ore. Overall, base metal prices are projected to rise 3 percent in 2025, remain broadly stable in 2026, and increase modestly by 2 percent in 2027, as persistent cyclical headwinds, including subdued economic activity, constrain further gains. In contrast, iron ore prices are expected to fall by 10 percent in 2025 (y/y), with additional declines of 4 percent in both 2026 and 2027.

Precious metals surged to record highs, led by gold and silver, with platinum also posting strong gains. The rally—especially in gold prices—has been fueled by robust investment demand, geopolitical tensions, and policy uncertainty. Central bank purchases have more than doubled since 2022 compared with the 2015–2019 average. Prices began to ease at the start of October, supported by a stronger dollar and investors locking in gains after the sharp rally. Gold prices are projected to rise by 42 percent in 2025, followed by more moderate increases of 5 percent in 2026 and 6 percent in 2027, supported by continued—though slower—central bank purchases and expectations of further U.S. monetary easing amid ongoing geopolitical and policy uncertainties.