The story of commodities in 2025 was “energy down, metals up hard”, says Ole Hansen of Saxo Bank. Silver and copper are continuing their record-breaking rallies, but the world’s oil men are feeling gloomy. Brent crude is down by a fifth since 1 January. The main European natural-gas benchmark is off 45% this year, to the relief of households. Overall, the Bloomberg Commodity Energy subindex has dropped 10% this year, even as the All Metals index has soared 43%.
Energy markets are dogged by talk of massive excess supply as Opec producers lift output caps, and new players such as Guyana enter the market. Meanwhile, China’s appetite for fuel is softening as its transition to greener supplies continues.
The International Energy Agency forecasts a near-four-million barrels a day surplus next year, equivalent to about 4% of global supply. Commodities firm Trafigura recently warned of a coming “super glut” as big new oil projects that were planned when prices were high enter production just as prices drop.
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Why copper is the new oil
Aluminium has rallied 13% this year, with zinc up 8%. But it is copper, with its 33% gain, that has been the real star. Prices on the London Metals Exchange (LME) have topped $11,700/tonne this month. “Much as oil dictated the geopolitics of the last century, access to copper is becoming an economic imperative in this one,” says James Attwood on Bloomberg.
Just three countries (Chile, the Democratic Republic of the Congo and Peru) account for almost half of all copper mining. More than 40% of copper processing takes place in China, much to the alarm of Western politicians. And it takes an average of 15 years to turn a new copper find into a productive mine, and big new discoveries have slowed to a trickle over the past decade.
Meanwhile, on the demand side, copper sits at the heart of mega-trends from the building of AI data centres to electric vehicles (which require three times as much wiring as those with internal-combustion engines).
But not everyone is feeling bullish. Global manufacturing is in the doldrums, with US factory activity falling for nine months in a row, says Andy Home on Reuters. This year’s supply crunch doesn’t represent strong demand so much as a market “fracture” caused by fears that 2026 will bring new US tariffs on refined copper. Anxious dealers have been shipping copper to the US en masse in anticipation of new import charges, clearing out Chinese and European warehouses in the process.
Copper prices may be poised to “decline somewhat” next year as they pull back from recent record highs, says Goldman Sachs Research. Demand for Chinese refined copper appears to have fallen 8% year-on-year in the fourth quarter. For all the talk of shortages, the metal is actually in surplus globally this year and should be next year, too.
That said, the longer-term outlook is bullish as “rising structural demand from power infrastructure” runs into limited new mined supply, with the market expected to enter a deficit in 2029. Analysts forecast an LME price in 2035 of $15,000 per tonne.
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