Market sentiment across the commodities rackets was dominated by two conflicting narratives: A sharp technical correction in precious metals following the United States nomination of Kevin Warsh as Fed chair, and a deepening malaise in the iron ore market.
Gold bulls are reassessing positions after a dollar-driven sell-off, and the industrial sector is digesting a bleak forecast for steelmaking iron ore.
New research from ANZ flags a "structural decline" in Chinese demand that threatens to send Fe prices tumbling below US$90/t by year-end.
Focus is now shifting to the looming supply wave in LNG and stubborn deficits in copper.
Bulk Commodities
Iron Ore (US$100.11/t)
The steel-making ingredient is facing a difficult year.
ANZ research indicates the market will face significant headwinds over the next 12 months as Chinese demand enters a "structural decline" with little prospect of government stimulus.
While spot prices have repeatedly tested and recovered from the US$100/t support level, the fundamentals are weakening.
Chinese steel exports surged 21.3% year-on-year in December to 12.7mt as exporters front-loaded shipments ahead of new licensing requirements.
However, with anti-dumping resistance hardening globally, ANZ expects export volumes to fall by as much as 30% in 2026.
Supply pressures are also mounting. After years of stagnation, seaborne supply is forecast to expand by 45mt (+2.6%) in 2026, bolstered by the ramp-up of the giant Simandou mine in Guinea.
ANZ forecasts prices to drift towards US$105/t by the end of Q1 before dipping to US$90/t by year-end.
Coal (US$107.10/t)
Thermal coal prices remain supported as U.S. power generators delay plant retirements to prevent grid instability during the ongoing data centre expansion.
Conversely, China’s seaborne coking coal imports are expected to remain subdued.
Domestic production is rebounding, and overland shipments from Mongolia are expanding, reducing the reliance on seaborne cargoes.
ANZ notes that without a material strengthening in Chinese demand, prices are likely to ease after holding steady in early 2026.
Precious Metals
Gold (US$4,951/oz)
The yellow metal’s record-breaking run paused after touching US$5,600, retreating as the Warsh nomination strengthened the U.S. dollar.
Despite the short-term correction, the medium-term outlook remains bullish.
ANZ forecasts prices to approach US$5,000/oz by June 2026, driven by continued central bank purchases - estimated at 900–950 tonnes this year - and lingering concerns over U.S. fiscal independence.
The metal continues to serve as a critical portfolio diversifier amid rising equity market concentration.
Silver (US$75.75/oz)
Silver experienced significant volatility, correcting sharply from its recent peak of US$121.
While the metal has benefited from tightening physical supply and its dual role as a monetary and industrial asset, it remains vulnerable in the near term.
ANZ highlights that easing market tightness and potential inventory releases could weigh on prices.
However, the gold-to-silver ratio is expected to recover from decade lows as the market stabilises.
Energy
Crude Oil (Brent US$68.10/bbl; WTI US$63.50/bbl)
Oil markets are navigating a complex geopolitical landscape.
U.S. sanctions on Rosneft and Lukoil are threatening a significant share of Russia’s oil exports, with India’s imports already plunging from 1.7mb/d to approximately 300kb/d.
While potential political transitions in Venezuela could eventually add supply, near-term instability keeps disruption risks high.
Globally, the market balance is expected to shift into a surplus of 1.74mb/d in 2026 as rising OPEC+ output meets softer refinery runs.
China’s strategic stockpiling remains a key factor absorbing excess barrels.
LNG (US$3.41/MMBtu)
The global gas market is bracing for a "supply wave" of new capacity.
Projects including Plaquemines, Corpus Christi Stage 3, and LNG Canada are set to lift global supply by roughly 10% in 2026.
While Europe remains a key demand centre as it replaces pipeline flows, the surge in new capacity is expected to overwhelm demand growth in the near term.
Woodside Energy and other exporters face a market skewed towards oversupply, with downside risks from weather-related swings and full inventories.
Uranium (US$85.25/lb)
The nuclear sector continues to perform well, with prices holding firm as Washington pushes for energy independence through domestic enrichment.
Lotus Resources has raised A$76 million (US$50 million) to restart its Kayelekera mine, targeting first shipments in Q2 to fill the widening supply gap.
Industrial Metals
Copper (US$12,840/t)
Copper remains the tightest corner of the commodities complex.
ANZ research indicates the market is set to remain undersupplied by 4–5% in 2026, as major mines struggle with outages and conservative production guidance limits output growth to just 1%.
The recent collapse of the Rio Tinto and Glencore merger talks highlights the difficulty miners face in securing new units of production.
Prices remain supported by the energy transition and data centre expansion, despite the risk of short-term pullbacks.
Lithium (US$18,400/t)
Lithium prices are stabilising as the market matures.
The U.S. State Department has launched Project Vault, a US$10 billion loan facility designed to secure domestic supply chains and insulate Western manufacturers from supply shocks.
Nickel (US$16,680/t)
Nickel prices jumped on expectations of Indonesian production cuts, though actual supply impacts may lag.
The market remains fundamentally oversupplied by more than 5% of annual demand.
With EV demand weakening due to expiring subsidies in the U.S. and China, upside potential remains limited.
Vale and other producers are navigating a high-inventory environment with a focus on cost discipline.
Aluminium (US$3,045/t)
Aluminium is holding above US$3,000, supported by U.S. trade uncertainty and China’s adherence to its 45mt production cap.
While global supply growth is slowing, near-term volatility is likely as fragmented trade flows push up regional premiums.
High energy costs in Europe continue to constrain smelting capacity, keeping the market balance tight.
