Commodity Price Watch: January 2026

Prices will be flat to slightly upward in 2026 for most globally traded industrial commodities, with crude oil the major exception. Trade barriers will continue to increase. Any upside pressure to pricing is more likely to come from supply disruptions or trade policies than from demand.

As measured by the Materials Price Index (MPI) by S&P Global Market Intelligence, industrial materials prices bottomed in the second quarter of 2025. For the fourth quarter of 2025, the MPI was 5% below its year-earlier level. Year-over-year growth for the second quarter of 2026 is expected to be only 0.7%, and for the second quarter of 2027 it is an additional 2.9%. There is no overwhelming driver such as COVID-19-related shortages (2020–22) or relapse from the spike (2023–24). Therefore, analysis is best done for individual commodities rather than trying to assert a broad trend.

The key for buyers looking at 2026 compared with 2025 is higher prices for metals and lower prices for crude oil, natural gas outside of the US, and chemicals. The strong divergence of different regional environments is also noteworthy.

A loose crude oil market will keep prices low over 2026. OPEC+ production gains over the course of 2025 have created a supply glut. This will keep Brent crude prices at or slightly below $60/b for the duration of 2026.

The United States’ Jan. 3 apprehension of Venezuelan President Nicolás Maduro is unlikely to have much effect on prices — at least in the short term. Venezuelan crude production is much lower than its turn of the millennium peak, and the likely effects on imports will have only marginal effects on global prices. 

This year will see the strongest US natural gas price since 2022. A wave of natural gas export facilities came online during 2025. Despite entering the withdrawal season with inventories at the top of the five-year history, record winter export demand will bring inventories down and send prices up, especially in the first quarter of 2026. Production will continue to play catch-up with demand, as producers want to see sustained high prices to believe them.

The petrochemicals sector faces strong supply, and we have a nearly flat outlook for chemicals and plastics pricing as a result. The bottom line is pricing leverage leans toward buyers for chemicals and plastics over the first half of 2026.

We have revised slightly downward our near-term forecast for the majority of chemical and resin series, as cost pressures are coming in softer than anticipated. Overall, market sentiment remains weak, and there are limited expectations of improvement in downstream markets that would encourage more purchasing.

With excess global fundamental capacity, the industry is facing tough choices. Both capacity rationalization and the cancellation of new projects are necessary. Downward risks center on energy costs weakening even further, especially if the projected near-term price increase for North American natural gas because of increased export activity does not firmly take hold.

US sheet prices continue to surprise to the upside, believed to be mostly driven by inventory restocking. There are no indications that underlying demand has improved. Upside momentum is faltering, and the hikes are expected to relapse by late in the first quarter or early in the second quarter. European sheet faces some of the same influences, and the view of spike-relapse is the same as for the US.

Other than trade barriers, there is no support for substantive price increases anywhere in the world. Prices have limited room to decline because they are near or below input costs in many regions. Prices have limited room to rise because buyers cannot or will not pay increases.

That said, steel protectionism is spreading, with Europe expected to significantly strengthen its tariff-rate quota (TRQ) and Asian markets cross-filing antidumping cases.

Aluminum prices came into 2026 higher, in a continuation of the drivers seen in 2025. A sharper-than-expected step-up can be attributed to renewed risks and increased volatility. This adds to the tight supply story. This upward price pressure and increased volatility are in keeping with other nonferrous and precious metals. In aluminum’s case, the rise has been more muted and more explainable by the supply picture.

The tight supply outlook, rising price, and increased geopolitical volatility have attracted more attention from a financial community looking both to benefit from aluminum’s price movement and to diversify into hard commodities. Financial speculation typically supports an existing price movement, so amplifying the current rising price, but rarely for more than a month. So, we expect that some of the recent step-up in prices to diminish as new year purchasing is satisfied and as financial players close out their positions.

Copper prices have been revised higher after having risen sharply at the start of the year. This is an acceleration of the trend seen throughout the second half of 2025. Copper prices are now more than 35% higher than the July 2025 average. The same price drivers remain in place, but a surge in new year buying activity and heightened geopolitical volatility have coincided to lift prices to levels not seen since 2022.