Where next for metals markets in 2025?

The positive spin on the outlook for metals markets as we entered 2025 was for healthy economic momentum and loosening monetary policy to supercharge demand. A few months later, any lingering hopes for such an optimistic scenario have been shattered.  

To make sense of the seismic shifts impacting metals markets, we held the Wood Mackenzie Future Facing Commodities Forum on 30th April 2025. Fill out the form to download the full slide deck of our metals markets presentation from the event, or read on for a quick summary of our metals market update. 

Struggling prices 

Already way off their peaks seen in 2022, prices across the metals and mining suite are struggling to hold their ground. Oversupplied value chains across steel, batteries and renewables are proving a persistent problem - only gold, copper and aluminium prices have remained above long-term averages early in 2025. This excess capacity issue is unlikely to be resolved any time soon, with a solution to battery value chain overcapacity unlikely until beyond the three-year horizon. 

Supply disruption has yielded gains in highly concentrated markets - cobalt spiked early in the year on the news of an export ban from the Democratic Republic of Congo and neodymium has been recovering as China constrained domestic quotas, and Myanmar imports. But other battery raw materials prices are trending down or flat, lying below or close to industry marginal costs. Base metal prices have been more volatile, with some broad selling in early 2025 during periods when fears arose around the resilience of the global economy. Given where many prices sit, widespread recoveries are possible; however, they are likely to be modest in scale. 

An uncertain macroeconomic landscape 

While the global economy started the year with positive momentum, the uncertain macroeconomic environment that has since emerged will limit any potential upside for metals. The consensus view for falling interest rates and stronger growth is now in question, with tariffs, fiscal deficits and ongoing volatility likely to weigh heavily. The potential consequences of the Trump administration’s pushing of tariffs into uncharted territory is clearly a particular concern; markets are currently more preoccupied by the possibility of recession than inflation and are pricing in lower interest rates than previously. Lower rates should act to stimulate investment, and drive higher metals demand, but only if economic uncertainty subsides. 

Peaking demand growth 

Aside from the general downward pressure on the global economy, 2025 should see a cyclical peak in demand growth for metals. On the upside, monetary easing and Chinese fiscal stimulus should help support manufacturing output, bolstering metals demand to some extent. The chart below compares historical and predicted annual demand growth between 2023 and 2026 with 10-year demand growth for base metals, rare earths, battery raw materials and bulks. Higher demand growth rates in 2025 should lay the foundation of price recovery. 

Supply security fears 

Despite the spectre of oversupply in many commodity markets, increased geopolitical tensions is fuelling concern around supply security. China dominates the processing of most critical minerals, including almost complete control of processing for battery graphite and lithium iron phosphate (LFP) used in cathodes. Overcapacity is a pervasive problem in Chinese battery and renewables supply chains; however, its control of critical minerals could become a powerful weapon in an ongoing trade war with the US. Restrictions on Chinese trade of certain critical minerals will hurt downstream investment in power and transport elsewhere, eventually damaging demand across a broad range of metals.   

A stalling transition? 

Metals-intensive low-carbon electrification remains a significant engine for demand, accounting for the vast majority of lithium, cobalt and graphite usage and growing proportions of nickel, aluminium, copper and steel markets. However, economic worries, challenging fiscal positions and political sensitivities have seen net-zero policies refined and rolled back, and investment in low carbon technology slow outside China. Trump’s re-election has exacerbated these trends with potential consequences for global metals demand.  

Learn more 

Don’t forget to fill in the form at the top of the page to receive your complimentary copy of the slides from our Future Facing Commodities event. This includes a wide range of charts covering copper aluminium, lithium, nickel, rare earths and cathode & anode precursors in more detail.