Metal Price News - May
The conflict in the Middle East is raging on with no prospect of peace. Commodity markets are still very much affected by the conflict, and we are also starting to see damage to the world economy.
China and the US have agreed to secure passage through the Strait of Hormuz, but how they will achieve that goal is unknown. As long as the strait remains closed, both aluminium production, oil production and the overall global economy are affected.
Macroeconomic developments
Energy infrastructure in the UAE has reportedly been further damaged this week, causing the price of oil to rise. At the same time, the latest figures from the International Energy Agency (IEA) show that the oil market will be undersupplied until October, even if the conflict ends before summer. This all points to further increases in the oil price.
In an attempt to ease pressure on the oil market, the US has paused sanctions on Russian oil, and that pause has just been extended.
We are already seeing major economies take a hit from the rising energy prices. In China, the US and Europe, inflation is rising, and there is talk of raising interest rates. Industrial production is declining in Europe and China, while the US is doing surprisingly well with continued growth.
Aluminium
Aluminium is at a stable, but high, level around 3500 USD/tonne or 3000 EUR/tonne.
The graph shows that production in the Gulf states has dropped as a response to the US/Israel attack on Iran. The declining production will affect supply for a long time to come.
Copper
Last week, the copper price temporarily jumped above 14,000 USD/tonne on the news that the Grasberg mine in Indonesia is not expected to reach full capacity until 2028, a delay of around 12 months. This will affect global copper production, but inventories are high at the moment, and the prospect of a global recession is dampening copper demand.
The graph below shows that global copper inventories are 2-3 times higher than they were at the same time last year – and yet prices are significantly higher now. This level of stock-building suggests that the market is preparing for a shortage, but it remains unclear what the cause of a shortage would be.
In our 2026 forecast (from January 2026), you can read more about this unusual movement in the copper market.
Stainless steel
Stainless steel remains mostly unaffected by the war. CBAM and the upcoming safeguard quota are still causing prices to rise, but activity in the market so far looks good.
The current safeguard quota will expire on 30 June, and the replacement is still not known. Right now, the market is working with a scenario where the quota is reduced by 50 % and tariffs are doubled on imports beyond the quota.
Sheets/plates
On sheets/plates, lead times are currently moving into September, partly due to summer maintenance breaks in southern Europe. European plants have been under pressure for months, as purchasers are placing orders in Europe instead of Asia to avoid tariffs and taxes. This is starting to show in the market.
Bars
Lead times are relatively normal at around three months. The plants have felt more pressure since CBAM came into force on 1 January, but the market remains stable, although prices are going up.