Market analyst BMI – a unit of Fitch Solutions – has forecast that metal prices will average slightly lower this year than in 2024, with BMI head of commodities analysis director Sabrin Chowdhury noting that prices are expected to remain “elevated and not crash just yet.”

Speaking during a webinar on February 4, she expressed that BMI holds a mildly negative view on the overall metals complex this year, noting that, while most commodities will average slightly lower this year compared with 2024 on a yearly average basis, prices will remain elevated compared with levels before 2022.

She noted that, while January saw a mixed price performance, with the first half showing metal price strength followed by weakness in the second half, the overall direction for industrial metals in 2025 is mildly downward.

“Metal price performance this year will largely be dictated by sentiment that is sensitive to stimulus announcements and economic data from mainland China, as well as policy developments in the US that will impact global growth, interest rates and the direction of the dollar.

“While most of the risks facing our 2025 price forecasts are to the downside, quarter four of 2024 saw some significant inventory clearing in some sectors, mainly due to idiosyncratic supply issues and a resurgence in Chinese demand that will now act as a floor for the coming months, preventing a price collapse in those metals should negative external factors aggravate the market,” she said.

Chowdhury noted that ferrous metals are expected to “suffer less” than base metals this year, as ferrous metals tend to gain more from mainland Chinese stimulus announcements, which she said is expected quite a lot this year.

Additionally, copper and tin are expected to fare better than aluminium and nickel owing to tighter tin and copper markets, driven by supply side factors and strong demand.

Moreover, she said iron-ore is expected to lead gains in the overall industrial metals complex as price resilience continues from positive sentiment over mainland Chinese stimulus hopes, falling port inventories and also rising demand from China's non property sectors, including machinery, shipping, autos and infrastructure.

Further, Chowdhury expressed an optimistic view on gold prices for this year as the metal benefits strongly from economic and geopolitical risks, with prices witnessing a pronounced rally since the start of the war in Gaza in October 2023 and then amplified by the weakening dollar throughout 2024 and the start of the US Federal Reserve's (Fed’s) rate cutting cycle last year.

She explained that the Fed is expected to adopt a more cautious approach to interest rate cuts, especially given that Trump's tariffs could raise US inflation and, subsequently, influence Fed policy that would likely depend on whether inflation or a growth shock will dominate.

Hence, she said the impact of interest rate cuts, which is still expected at a total of 50 basis points this year, will be more nuanced on gold prices than in 2024, adding that gold is expected to once again be an “outperformer” within the wider metals complex.

Overall, Chowdhury said BMI expects this year to be a “close tug of war” between fundamentals and sentiment driven by macro factors.

She noted that most metal markets are expected to tighten, with copper, tin and steel markets expected to experience severe tightening driven by a less positive supply outlook and mildly recovering demand from the power and construction sectors globally.

“The outlook for all the major end-use industries that require metals remain bleak, and this will dampen sentiment greatly in general.

“We expect 2025 to tell a cautious story, led largely by investor sentiment, as metals across the complex navigate new supply chain dynamics in a year of severe trade tensions and a wait for stimulus from mainland China, one that would actually materialise in physical demand to see the light at the end of the tunnel,” she said.