Prices & Review

Overview (May 2025)

The base metals have had a quieter month in May, with prices generally recouping some of the lost ground following the tariff-induced March-April sell-offs. At the March highs, base metals prices were up an average of 12 percent from the end of 2024, as of late-May, copper and tin were up 9 percent and 6 percent, zinc and aluminium were down 11 percent and 4 percent respectively, while nickel and lead were little changed. As May drew to a close, weakness started to emerge in some of the metals as the on/off news surrounding tariffs and poor economic data weighed on sentiment. In some cases developments in the individual metals also affected prices, with for example copper holding up following supply disruptions in the DRC and tin falling amid rumors that the Man Maw mine in Myanmar was starting to restart production. Gold prices were choppier in May, and no new high was posted in the month, the first month this year that has not seen a fresh record high. The prospect of more US trade deals, especially with the larger trading partners, China and Europe, combined with a halt in the dollar’s slide and potentially some progress on Russia/Ukraine peace talks, have eased some of the geopolitical tension which has reduced further safe-haven demand for gold, but there has not been much long liquidation in gold, just less buying.

The tariff issue remains unresolved, which is likely causing many businesses worldwide to delay their investment decisions. This hesitation is expected to dampen economic growth. Delays in capital expenditure related to on-shoring initiatives are likely to reduce demand for base metals, which are extensively used in infrastructure and construction. As these conditions begin to appear in global economic data, it is likely to further negatively impact metal demand, sentiment and prices. While markets may have already anticipated some of the news, it is probable that economies have increased production in recent months to maximize exports to the US before tariffs are fully implemented. This likely boosted demand for metals; however, bringing forward demand could result in a subsequent period of weaker demand.

The Dow Jones Industrial Index was around 45,000 earlier in 2025, it fell to a low of 36,500 in early-April, but has recently been rangebound just below 43,000. US ten-year treasury yields rose in the first half of May, reaching a high of 4.60 percent, from 4.16 percent at the start of the month, but have since drifted to 4.43 percent. The passing of US President Donald Trump’s “big beautiful (tax) bill” sent US treasuries lower and yields higher as the market anticipated more US treasury auctions to fund the bigger budget deficit.