Global growth concerns to weigh on metal prices

The World Bank’s metals and minerals price index edged up by 3 percent in May, partially recovering from an 8 percent plunge in April that had erased gains from early 2025. Metal prices have recently been shaped by rising global economic uncertainty and intensifying trade tensions. Prices are expected to decline through 2025 and 2026, reflecting deteriorating sentiment about the demand outlook. Risks to the outlook remain significant: a sharper-than-expected slowdown in global economic activity could push prices even lower, while easing trade tensions or supply disruptions in major producing countries could push prices higher than projected. 

Mounting concerns over global growth are set to weigh on metal demand. The escalation of trade tensions in early April, along with a deterioration in the global economic outlook, pushed global manufacturing purchasing managers’ indexes (PMIs) into contractionary territory in April for the first time this year. Meanwhile, growth in China—the world’s largest metals consumer—is projected to slow further in the coming years, weighed down by higher trade barriers, weaker external demand, and subdued domestic consumption, despite announced policy support. Persistent weakness in China’s property sector is also curbing demand for construction-related base metals, including iron ore. Even so, increased investment in renewable energy infrastructure is expected to offer some support, particularly for metals such as copper.

Metal prices are projected to decline in 2025–26, following gains in 2024. The World Bank’s metals and minerals price index is forecast to fall by 10 percent in 2025 and a further 3 percent in 2026, with the steepest declines anticipated for aluminum, copper, iron ore, and zinc. These projections reflect a weakening global demand outlook over the forecast period, including a slowdown in China, the world’s largest consumer of industrial metals. Tin is the only base metal expected to post a modest price increase over the next two years, driven by tightening supply conditions and a limited pipeline of new mining projects. Meanwhile, production of other metals—including iron ore—is expected to continue rising, supported by expanded mining operations.

The price outlook is subject to numerous risks. The main downside risk is a sharper-than-expected slowdown in global growth, as metals demand is closely linked to investment activity and durable goods consumption—both highly sensitive to economic conditions. A deeper global slowdown, particularly in the presence of ample supplies, could place significant downward pressure on base metal prices. On the upside, a durable rollback of trade tensions, along with reduced policy uncertainty, could improve demand prospects. Supply-side risks also remain prominent. These include trade restrictions and unexpected disruptions—such as stricter environmental regulations, labor disputes, operational issues, or extreme weather events—that could constrain raw material supply. For example, recent flooding at one of the world’s largest copper mines, in the Democratic Republic of Congo, has heightened short-term supply concerns. Such disruptions can tighten markets, especially for metals concentrated among a few producers. Additionally, China’s aluminum output is nearing its self-imposed limit of 45 million tons per year, set in 2017 to curb carbon emissions; enforcement of this limit could further restrict supply and push prices higher.