Prices & Review

Overview (March 2026)

The US and Israel war with Iran has resulted in the near shutdown of the Strait of Hormuz, significantly affecting global markets. The unfolding energy crisis is having widespread consequences that may hinder economic growth, increase inflation, and cause shortages of essential supplies.

The Iran conflict has dominated market action in March, pushing most other drivers, or concerns, in the background. Despite this, equity markets have remained relatively resilient: the Dow Jones, Nasdaq and China’s CSI 300 have each fallen by around 5 percent, while the Dax and Nikkei have declined more sharply - by 10.5 and 9 percent respectively - largely due to their greater dependence on oil and gas from the Middle East. Although China is also a major energy importer, it benefits from strong ties with Russia, which helps mitigate some of the impact.

The base metals, excluding aluminium, are down between 2.1 percent for nickel and 23.2 percent for tin. Nickel is down the least, partly because Indonesian nickel production may be disrupted due to its reliance on sulphur imports from the Middle East. By contrast, tin has experienced the steepest drop, due to its relatively small market size, the general risk-off sentiment, and the fact that prices were recently at record highs.

Copper (-7.8%), zinc (-6.1%) and lead (-3.3%) are down an average of 5.7 percent, so more in line with losses in US and Chinese equity markets. Ironically, the precious metals as a group are down the most, with losses of between 15.6 percent for gold and 26.5 percent for silver, with the PGMs down either side of 22 percent. These percentage losses reflect prices at the time of writing (March 26) compared with the closes on February 27, the day before the attack.

Like tin, precious metals have come under pressure, largely because their strong performance in recent months/years has prompted significant profit-taking. Lithium has been modestly affected, with concerns that Middle East demand for energy storage systems may be put on hold during the conflict, but prices remain elevated compared with start-of-year levels. Meanwhile, cobalt prices have been unaffected and remain elevated with the market still focused on the limited supply coming out of the DRC.

Rising inflation expectations have pushed US ten-year treasury yields to 4.4 percent up from 3.95 percent on February 27. Higher yields have boosted the dollar, with the Dollar Index climbing to 100, from 97.6 over the same period.

Elevated oil and LNG prices are already weighing on economies and their currencies. The Indian rupee approaching 95, up from 90 at the end of 2025 and the South Korean Won at 1,509, up from 1,437 over the same period. Some countries have already started rationing fuel and one oil major has warned Europe could face fuel shortages as early as April.

The IEA has announced it will release 400-million barrels of crude oil and fuel from its member countries’ 1.2-billion barrels of reserves. This is perhaps why oil prices are holding either side of $100 per barrel for now, and have not moved considerably higher.

Considerable uncertainty remains over how the Iran conflict will unfold. For metals, the initial impact is being felt on the supply side, as higher energy costs and shortages constrain production, while disruptions to shipping routes and supply chains limit availability. A secondary effect may arise later from weakening demand as the energy shocks weighs on global growth.