Commodity Price Watch: September 2025

Commodity prices are expected to remain subdued over the next 12 months. Manufacturing and construction activity are weak in the world’s largest economies. Even as consumption languishes, there are instances of capacity growth. Upside price risk is more likely to come from cuts in production rather than increases in demand.

The S&P Global Market Intelligence Purchasing Managers’ Index™ (PMI®) for global manufacturing new orders climbed slightly into positive territory in August, but this barely offset the weakness observed in July. The future output expectations measure continues to trend more negative.

The energy sector is facing a downward revision in price forecasts. Brent crude prices are poised to decline over 2026, with much of the decline coming in the fourth quarter of 2025. Refined product prices will largely move in lockstep with crude. 

US natural gas prices will remain in the lower u range for 2025 before increasing in 2026. Demand from the power sector was weaker than expected and production was able to ramp up quickly in response to rising prices because there were already projects further along the production chain, eliminating some of the usual lag. This translates into stronger inventories, which keep prices lower for longer. 

In contrast, European natural gas prices are projected to decline significantly by 2027, reflecting a structural loosening of the global LNG market as the US dramatically increases its LNG exports.

The global chemicals and resins market is flush with supply and has several big new capacity additions in the pipeline. A surge in new production capacity has quickly pushed the world market into oversupply, and the situation is likely to persist for an extended period. The market is facing the stark fundamental realities of eroding global demand and excess supply capacity.

Benzene supply will remain strong into 2026. Ample supplies and soft cost pressures in the months ahead are a recipe for low market pricing. In fact, global benzene pricing has been soft for much of the year, with levels in August remaining about 25% below year-earlier levels. Rising concerns regarding the health of the US and global economies are not helping sentiment and have added to growing bearish sentiments for the short term.

Steel markets are weak globally with ample supply, idle capacity, and weak to falling demand. Steel is a buyer’s market in all regions of the world, for all products except the niche aircraft steel grades. 

Demand will remain subdued well into 2026, and some of the largest end markets are in outright contraction. Mills are forced to restrain output to limit surplus. Prices are near the cost of production in key regions such as East Asia and Europe. Demand should improve marginally in 2026 after expected interest rate cuts, but will not boom, so price support will be minimal.

In the nonferrous metals sector, markets are grappling with oversupply and fluctuating demand. For instance, copper prices are expected to trend downward after a period of volatility, with inventories rising significantly in exchange warehouses. 

Nickel prices are projected to remain range-bound at low levels, primarily due to global oversupply and slowing demand growth in Asia. Growth in the supply of nickel has been robust in recent years, more than outpacing growth in demand. This has resulted in a build in visible inventories and downward pressure on prices. 

Aluminum prices on the LME have been muted, mostly moving sideways with a mild downward trend. New orders and associated lead indicators point to weakening demand. Aluminum demand in the first half of the year was helped by front-loading, but with inventories of both aluminum and aluminum-containing goods looking well stocked, that driver has now evaporated. Prices are not expected to correct, although with the inflationary pressures of tariffs and a weaker dollar, prices have some support.

—With contributions from Keyla Goodno