Prices & Review

Overview (June 2026)

Base metals remained elevated in the first half of June as markets continued to focus on supply disruptions caused by the war in Iran. Prices were also supported by ongoing bullish structural themes like artificial intelligence (AI), data center investments and electrification. However, sentiment changed in the second half of the month as hopes of a US-Iran peace agreement reduced concerns about supply disruptions. As fears of a prolonged energy crisis eased, investors started to unwind the war premium, pushing base metal prices down by an average of 12 percent. Copper, lead and zinc fell by around 7.4 percent, while the other base metals declined by around 16.5 percent. Brent crude oil prices fell 26.5 percent to around $72 per barrel in June, from $98 per barrel at the start of the month.

The decline in metals was reinforced by a more hawkish US Federal Reserve. The new Fed Chair, Kevin Warsh, signaled greater concern about inflation than markets had expected. This lifted US ten-year treasury yields and the dollar, both of which also weighed on metal prices. Ten-year yields climbed to a high of 4.57 percent in June, from 4.44 percent at the end of May and the US Dollar Index climbed to 101.80 from 98.75, in the same period. The stronger dollar and higher interest rates also added downward pressure to the precious metals, with gold prices falling 12.9 percent in June, and the more industrial precious metals falling by an average of around 23 percent.

Global equity markets also saw increased volatility in June as investors responded to shifting geopolitical risks, changing interest rate expectations and liquidity concerns. US technology stocks experienced two sharp sell-offs with a brief recovery in between, while defensive sectors such as healthcare and consumer goods provided more stability. European indices reached record highs early in the month but finished softer as energy stocks fell and supply chain concerns persisted. Asian markets recorded the largest losses, with Japan’s Nikkei and South Korea’s Kospi triggering circuit breakers following a massive slide in AI hardware and memory-chip manufacturers.

Despite market volatility, economic activity in the major western economies, particularly the US, remained resilient. Preliminary manufacturing purchasing managers index (PMI) data for the US, UK, Europe and Japan averaged 53.75 in June, almost unchanged from 53.78 in May. Inflation remains elevated, with US annual inflation rising to 4.2 percent in May from 3.8 percent in April, its highest level since April 2023. However, lower oil prices should help reduce inflation in the coming months.

China’s economy continues to show mixed performance. Growth is increasingly driven by manufacturing and exports as weak consumer spending persists. While strong manufacturing activity would normally support metal demand, performance across industries is uneven. High-tech manufacturers, including computer, semiconductor, and electronic equipment companies, continue to benefit from strong global AI demand. Conversely, automakers and durable goods manufacturers are facing falling profits because of intense domestic competition and weak consumer demand.

Looking ahead, weaker equity markets, a more hawkish Federal Reserve, and easing supply chain pressures if the Strait of Hormuz reopens are likely to weigh on refined metal prices. However, with no peace agreement yet reached in the Middle East, uncertainty remains high and market volatility is expected to stay elevated.