In late 2025, commodity markets stand at a crossroads. After a steep downturn in 2024, prices are poised to slide further as global growth slows. Yet beneath the surface, sector-specific dynamics—ranging from energy supply expansions to food security concerns—offer important signals for investors, policymakers, and producers alike.

Understanding these shifting currents is vital. From oil fields to battery minerals, each segment tells a story about supply chains, technological transitions, and geopolitical tensions shaping the world’s economic trajectory.

Macro Overview and Price Outlook

Global commodity prices experienced a marked decline in 2024, and forecasts point to an additional contraction of 12% in 2025 and 5% in 2026. This represents the lowest aggregate price level in six years, driven by a combination of weakening demand and persistent oversupply.

broad-based price softening across most commodities has become the defining theme of this cycle, with over half of all commodities expected to see double-digit declines. At the same time, volatility remains elevated: analysts label 2020–2024 as the most volatile decade in half a century.

• World Bank projects a 12% drop in 2025, 5% further fall in 2026.
• Over half of all commodities forecast to decline sharply.
• Volatility persists above long-term averages amid policy uncertainty.

Oil, Gas, and the Energy Landscape

Oil markets face downward pressure as consumption growth slows and supplies expand. The World Bank expects global oil supply to exceed 104 million barrels per day (mb/d) in 2025, up 1.2 mb/d year-on-year. OPEC+ is set to add 0.3 mb/d, while new production from Brazil, Canada, and Guyana contributes an extra 0.4 mb/d.

Demand gains of just 0.7 mb/d reflect weak industrial activity in China and a structural decline in gasoline use due to rising EV adoption in developed countries. High storage inventories, particularly in the US, further weigh on benchmark prices.

Natural gas prices remain subdued after record storage levels in 2024. The expiration of key pipeline deals in Europe raises the specter of tighter LNG markets, even as new export capacity from the Gulf of Mexico promises to alleviate shortages.

Industrial Metals and the Green Transition

Steel continues to grapple with oversupply and tepid demand, especially from China’s struggling property sector. Excess capacity has ballooned as mills ramp up production for export markets, intensifying global price pressure.

Meanwhile, demand for base metals—copper, nickel, aluminum, lithium—is buoyed by the green energy transition. Investment in renewable infrastructure, EVs, and battery manufacturing underpins rising demand for critical minerals supporting decarbonization, even as overall manufacturing output softens.

• Steel faces persistent oversupply; modest recovery expected late 2025.
• Copper and nickel demand underpinned by electrification trends.
• Investment gap in new mine capacity across Latin America, Africa, Asia.

Precious Metals: Gold and Silver Outlook

Gold emerges as a standout performer in 2025. Central banks, particularly in emerging markets and China, have significantly increased purchases to diversify foreign reserves. Over the past two years, China alone added more than 180 tonnes to its stockpile.

The metal’s allure is reinforced by falling real yields and ongoing uncertainty. Silver, often benefiting from industrial demand tied to solar panels and electronics, also enjoys supportive fundamentals.

Agricultural Commodities: Supply, Demand, and Climate

Global harvests in 2024 delivered record volumes of soybeans and maize, lifting stocks-to-use ratios to multi-year highs. The soybean ratio stands at its loftiest level in 17 years, driven by a bumper Brazilian crop and tepid demand.

Wheat stocks, while tighter, remain comfortable, and rice prices have fallen sharply since India lifted export restrictions. Fertilizer costs are ascending, however, offering some support to farmgate prices.

• High stocks and ample global harvests cap staple prices.
• Crop-specific dynamics: wheat steady, rice easing, corn stable.
• Fertilizer price increases provide a price floor for producers.

Weather volatility—from droughts to floods—continues to pose a risk, highlighting the need for resilient supply chains and adaptive farming practices.

Policy, Geopolitics, and Emerging Themes

Trade tensions, notably US–China tariffs, have disrupted agricultural and industrial exports, adding to market unpredictability. Geopolitical flashpoints in Europe, the Middle East, and Asia amplify worries over supply security and investment flows.

In response, many nations pursue reshoring strategies and stockpile critical resources. Digital platforms for commodity financing and trade are accelerating, promising efficiency gains but also new cybersecurity risks.

Quantitative Forecasts and Economic Backdrop

World GDP growth of 2.6% and industrial output expansion of 3.3% in 2025 fall below recent averages. Yet these figures underscore a modest recovery from recessionary pressures, providing a mixed backdrop for commodity demand.

Overall, commodity price volatility is expected to stay elevated, reflecting the interplay of macro fragility, policy shifts, and unforeseen shocks.

Risks and Outlook: Navigating Uncertainty

Downside risks remain dominant. A sharper global slowdown, renewed tariff escalations, or tighter financial conditions could further depress prices. Conversely, severe weather, geopolitical shocks, or a faster-than-expected economic rebound could spur sudden price spikes.

For market participants, the imperative is clear: enhance risk management frameworks, diversify supply sources, and stay informed on evolving demand patterns. While lower prices may challenge producers, they also present buying opportunities for consumers and investors positioning for the next upcycle.

As 2025 unfolds, the commodity landscape will continue to reflect the tension between structural supply gluts and transformative demand drivers. Navigating this terrain demands both macro awareness and granular insights into individual markets—an endeavor that will define investment success in the coming years.