Theme of the Day: Consensus price forecasts – US, Israel war on Iran roils metals markets

The war in the Middle East drove volatility across metals markets in Mar said S&P Global. As flight-to-safety interest and emerging macroeconomic headwinds vied for influence across the precious metals complex, supply shocks and demand pessimism swayed industrial markets. Consensus price targets in 2026–30 have been broadly upgraded. Despite uplift in Chinese demand coming off the Lunar New Year holiday, market sentiments deteriorated as the escalating war in the Middle East fuelled uncertainty over the global economy and prompted participants to adopt defensive positioning in copper. Global visible copper stockpiles reached a multiyear high at 1.3Mt in Mar, while the concentrate market remained undersupplied. As treatment charges remain suppressed, smelter operations derive support from elevated sulfuric acid prices, which have gained further momentum from tightening availability due to the constrained passage along the Strait of Hormuz. Copper consensus price expectations were lifted 2.1% on average across 2026–30, with green-economy demand helping to underpin the upside. Escalating risks to aluminium supply amid Middle East smelter curtailments supported prices, though gains were pared by surging energy costs jeopardizing consumption. Regional premiums in Europe, Japan and the US remained elevated, reflecting mounting supply anxieties and reliance on metal from the Middle East. Uncertainty around the duration of the war is keeping the market volatile, with prospects of a slowing global economy and the risk of demand destruction dragging on sentiments. Aluminium consensus price targets were downgraded 0.4% on average for 2026–30. Nickel prices fluctuated during Mar but remained caught within its recent range at $16,800-$18,000/mt. Constraints to sulphur supply — a critical component to high-pressure acid leaching (HPAL) operations — could tighten the availability of battery-grade nickel. Supply-side risks are compounded by rising energy costs that could hike input costs and prompt metal producers to curtail operations. As supply issues extend beyond the changing regulatory landscape for top producer Indonesia, nickel consensus price targets were lifted 1.3% on average for 2026–30. With China's shift in focus to quality-driven growth aided by technological advancement, battery demand for nickel is poised to remain supported, as the steel sector's role as consumption growth driver shrinks. Cobalt consensus price outlooks have been upgraded 0.4% on average for 2026–29 and 5.9% for 2030. Worries over adverse demand implications of a prolonged war in the Middle East drove pressure on zinc, amplified by higher-for-longer US rates and China's cautious economic targets. Yet, supply vulnerabilities keep the upside viable; while the concentrate market squeeze persists, disruptions to shipping routes that tighten fuel availability and lift energy costs could result in potential curbs to smelter operations that would put refined supply levels at risk. Zinc consensus price outlooks were raised 3.7% on average across the five-year forecast horizon. Policy directions from Beijing's Two Sessions meeting reinforced bearish outlook for steel production, with the introduction a more moderate GDP growth target and renewed efforts to curb overcapacity in heavy industries. On the supply side, the Simandou mine in Guinea is facing transportation challenges likely to delay ramp-up, while conflict-driven energy inflation could lift mine production costs and tighten supplies in the near term. Consensus price forecasts for iron ore across 2026–30 have been upgraded 1.3% on average. As gold retains its strategic appeal, consensus price targets have been raised 2.0% on average for 2026–28 but remain almost unchanged for 2029–30. Consensus price expectations for silver were lifted 3.1% on average for 2026–28 and downgraded 2.5% for 2029–30. Consensus price targets across the five-year forecast horizon were upgraded 2.9% on average for platinum and 6.9% for palladium.