Metals enter a new era

China remains a key consumer, but it no longer dominates global metals demand as it once did. Today, demand is more sector-specific and shaped by electrification, clean energy, defence spending and data infrastructure, rather than broad-based industrial expansion. However, this shift is uneven, policy-driven and highly sensitive to technology choices and regulation.

The shift is reshaping demand across the metals complex. Metals closely linked to electrification are increasingly influenced by policy incentives and technology adoption rather than traditional industrial cycles.

The metals leading the rally right now are the ones critical for global electrification.

Silver rallied past $80/oz for the first time in history as 2025 drew to a close, following a rally of over 25% in December alone. Copper also hit a series of all-time highs in an end-of-the-year rally, climbing 42% in 2025, making it the best performer of the six industrial metals on the LME.

Copper remains central to grid expansion, renewables and EV infrastructure, while silver’s role in solar panels and advanced electronics has raised its strategic importance. Both metals have been included in the US Geological Survey List of Critical Minerals.

New sources of demand are also emerging, with data centres and AI infrastructure becoming major consumers of metals such as copper and aluminium.

Rising defence spending across multiple regions is boosting the need for aluminium, titanium, copper and specialty alloys.

By contrast, more 'traditional' metals that are still heavily linked to construction, infrastructure, and global manufacturing cycles, like iron ore or zinc, remain more sensitive to cyclical economic conditions.

Years of underinvestment, declining ore grades and longer permitting timelines mean that higher prices no longer deliver rapid supply responses. Environmental and social constraints are reinforcing this rigidity, particularly in developed economies.

Resource nationalism has become a defining feature of metals markets. Indonesia’s ban on nickel ore exports and China’s tighter rare earth export controls are all part of a broader trend. Governments are actively reshaping supply chains to capture more value and secure strategic materials, making supply both slower and riskier. Even when prices rise, new tonnes arrive slowly, and often from jurisdictions facing higher geopolitical or ESG risk.

The result is a market where tightness persists longer, price spikes are more likely, and volatility is structurally higher.

Critical minerals are increasingly viewed as strategic assets. Measures like export controls and stockpiling have become central to industrial policy.

The last few years have seen multiple instances of policy intervention affecting metals flows, especially for critical raw materials, including China’s export restrictions on rare earths, gallium, germanium, and antimony, as well as broader trade and technology controls.

Within this context, governments are accelerating efforts to build reserves of critical minerals. In the US, the Pentagon is seeking to procure up to $1bn worth of critical minerals as part of a global stockpiling spree, including cobalt, antimony, tantalum and scandium, to counter supply chain risks, especially from over-reliance on single suppliers like China.

Similarly, the European Union is actively moving to stockpile critical raw materials, through its new RESourceEU Action Plan, with joint purchasing and stockpiling initiatives starting in 2026. This initiative is building on the Critical Raw Materials Act (CRMA), aiming to secure materials vital for green tech and defence.

Unlike commercial demand, stockpiling is price-insensitive and occurs in distinct procurement cycles, adding a new layer of volatility.

As more governments accelerate efforts to bolster national stockpiles, it is likely to become a persistent feature of metal markets' dynamics.

Markets that once reacted primarily to economic data are now increasingly shaped by diplomacy, sanctions and industrial policy - a structural shift reshaping pricing dynamics and global flows.

Taken together, these forces suggest the next metals cycle will look fundamentally different from those of the past.

The new phase for metals markets will be shaped by diversified demand sources driven by electrification, defence and digital infrastructure, slower supply responses amid more constrained and politicised supply, increased volatility from geopolitics and decarbonisation, and the growing role of stockpiling and defence spending.

Understanding these drivers will be central to navigating metals markets in 2026 and beyond.