Metal and mining: a year of dangerous trading
Uncertainty about the US administrative trade tariff policy has paralyzed investment and placed Chokeholding on economic growth throughout the world. The metal demand has been hit hard, and a new metal supply is blocked.
In our July-logam and mining edition perspective, we review the prospects of short-term commodity market trends, attract general themes, explore contrasting wealth from the commodities that we discussed and adjust our estimates. Fill in the form for a free slide option from our report and continue to read for a larger outline.
US rates: how to lose friends and exile investments
It still needs to be seen where US tariffs on imported products from all over the world will end, but uncertainty about US administrative tariff policies already has a clear and real effect on industrial production.
Wood Mackenzie estimates that the net import tariffs on goods to the US to average about 10% of the total annual US import value in all term of office of President Donald Trump, up from 2.5% in 2024. It is necessary to be questioned whether the tariff policy will meet the objectives stated to increase US domestic investment in supply and increase industrial income and domestic manufacturing.
The US economy has been reversed, with GDP shrinking 0.1% in the year in Q1. We now estimate the growth of GDP 1.5% and 1.6% US in 2025 and 2026. Consumer confidence has collapsed, and inflation expectations remain high. The US dollar loses its allure.
Global growth requires a blow
The trust dent on the US has a clear knock-on effect on the global economy. We have cut our estimates for 2025 global GDP growth to 2.4% from 2.8%. The industry will be affected disproportionally: We have shaved 90BP from the estimated production of our global industry to 2.2% in 2025 and cut our 2026 estimates of 60bp to 2.6%.
Images in Asia vary. The relocation of the supply chain induced by tariffs must benefit India, but we have reduced the estimated GDP of India by 40BP to 6.4% this year, still. Taiwan, South Korea, Japan, and other Southeast Asian economies have more risk than new rates.
European Union’s beginner growth will stagnate as a result of tariffs, meanwhile, because industrial production remains flat in 2025 after two years of decline.
China holds it yourself
China follows a good ending up to 2024 with solid growth in the year to May. Exports rose 6% even though industry tariffs and production rose 6.3%. This places China on the path for better annual growth in 2025 than in 2024.
However, there are concerns for H2 2025. Fiscal support for consumers both and the car trade-in program, which has encouraged growth, is likely to shrink in the second half of the year and until 2026. Prospects for Real Estate remain poor. And the growth of exports of years and dated is partly caused by hoarding in front of the US tariff; Can export to the US drop down 30% this year, signifying the problem ahead when trade barriers increase.
Our GDP growth forecast for our 2025 for China is now 4.3%, down 50 bp from our previous estimates. This may be conservative, but we think reaching the target of 5% of the country will be a challenge.
Metal and mining feel heat
Concerns about the tariffs and prospects for China’s growth have kept a calm metal market. The battery metal has tested the lowest new position. The growth of plug-in electric vehicles has encouraging, but the momentum has been lost, especially outside of China. The supply side response has an impact that can be ignored.
Basic metal has been the best. We have seen the results of heretical markets in copper lately, with short mini raising prices at the London Metal Exchange (LME) in June, while the metal stock is low and concentrate shortage also supports the price of copper and zinc.
We have reduced the estimated price of our 2025 in all boards with lower industrial production growth rates. Kobalt remains an exception, because the Democratic Republic of the prohibition of Congo exports.
Outlook until 2027
We expect copper, aluminum, and zinc to mostly maintain this new profit, although the fine metal deficit turns into a surplus during that period. Stocks of consumption days are regulated to remain below the long-term average, even when supplies increase, supporting prices. However, we have recalled our estimated price and now see Seng on average US $ 3,000/T in 2026, with a peak of US $ 3,300/T no longer on the card. Copper will remain below US $ 10,000/t.
Prospects for battery raw materials remain similar to our previous view. Reverse potential is still limited, although the chemical prices of spodumenic and lithium tend to recover from a very low level. Soil prospects are rarely positive in good magnetic demand and persistent government limits on Chinese imports and production.
Source: Wood Mackenzie
