Metal prices poised to strengthen further

This blog post is part of a special series based on the October 2025 Commodity Markets Outlook, a flagship report published by the World Bank. This series features concise summaries of commodity-specific sections extracted from the report. Explore the full report here.

The World Bank’s metals and minerals price index steadied in November after surging 6 percent in October, building on a 4 percent rise in 2025Q3. These gains are supported by resilient demand and emerging supply concerns, particularly for copper. Prices for most base metals are expected to firm further in 2026 and 2027 as modest demand growth coincides with tightening supply conditions. While a range of upside risks could push metal prices above baseline projections—including possible production disruptions, new trade restrictions, and a faster-than-expected expansion of data centers—the overall balance of risks remains tilted to the downside. Weaker-than-anticipated growth in major economies continues to pose the most significant risk to metal demand.

Resilient global activity continued to support metal demand. Despite elevated uncertainty—including from trade tensions—global activity remained steady, with manufacturing PMIs returning to expansion after a brief dip into contraction earlier in the year. China’s activity also held up better than expected, supported by accommodative policies and strong exports, although persistent weakness in its property sector continues to weigh on demand for construction-related metals, particularly iron ore. Even so, rising investment in renewable energy technologies and electrification infrastructure is providing an offset, supporting demand for metals such as aluminum and copper.

Supply conditions remain tight across several metals. Base metals production growth was subdued through the first three quarters of the year and is expected to remain weak over the forecast period. For several key metals, including aluminum and copper, output growth is being constrained by operational disruptions and production limits. Recent disruptions at major mining operations—including the incident at Indonesia’s Grasberg mine, one of the world’s largest copper mines—underscore the vulnerability of global supply. On the policy side, China’s aluminum output is nearing its self-imposed 45-million-metric-ton annual cap, reinforcing constraints on additional production growth. By contrast, iron ore supply is set to expand, supported by rising production in major producer countries and new low-cost output from the Simandou project in Guinea.

Metal prices are expected to rise further in 2026–27. The World Bank’s base metal price index is expected to increase by almost 2 percent over this period. Aluminum, nickel, tin, and copper are expected to see the largest increases, with copper and tin—both essential for clean-energy technologies—projected to reach new record highs in nominal U.S. dollar terms. These forecasts assume persistent supply constraints that are expected to keep markets for several base metals, including aluminum, copper, and tin, relatively tight through 2027. Nonetheless, subdued global growth, including in China, may temper the pace of demand expansion. Iron ore prices, by contrast, are expected to decline further in 2026–27, falling below 2019 levels. 

The price outlook is subject to numerous risks, with the balance tilted to the downside. On the upside, however, several supply-side factors could push prices above current projections. Metal production is vulnerable to unexpected disruptions from extreme weather, new regulatory measures, energy or water shortages, operational challenges, or labor disputes. Such disruptions could tighten markets, especially for aluminum, copper, and tin. Trade restrictions also present upside risks: recent U.S. tariffs on semi-finished copper products and aluminum, along with potential future tariffs on refined copper, could disrupt supply chains and lift prices. A faster-than-expected expansion of AI-related data centers represents a further upside risk, given their intensive metal use.

Even so, downside risks dominate. The most significant is weaker-than-expected global growth—particularly in China, which accounts for about half of global base metal consumption. Metal demand is highly sensitive to investment and durable goods production, so rising geopolitical tensions, renewed trade frictions, or elevated policy uncertainty could weaken growth and place significant downward pressure on demand and prices.