This report does not constitute a rating action.

S&P Global Ratings has reviewed its metal and coal price assumptions in the context of global trade developments and updated economic forecasts. We have again revised upward our gold price assumptions and lowered our assumptions for metallurgical and thermal coal prices. Other price assumptions remained unchanged.

We believe there is a high degree of unpredictability about policy implementation by the U.S. administration and possible responses--specifically with regard to tariffs--and the potential effect on economies, supply chains, and credit conditions around the world. As a result, our baseline forecasts carry a significant amount of uncertainty. As situations evolve, we will gauge the macro and credit materiality of potential and actual policy shifts and reassess our guidance accordingly (see our research here: spglobal.com/ratings).

S&P Global Ratings' price assumptions for metals and coal
	--Revised assumptions (as of May 16, 2025)--			--Previous assumptions (as of March 5, 2025)--
	Remainder of 2025	2026	2027	Remainder of 2025	2026	2027
Aluminum ($/mt)	2,500	2,600	2,600	2,500	2,600	2,600
Metallurgical coal ($/mt)	190	200	200	200	200	200
Thermal coal* ($/mt)	105	100	90	125	110	90
Copper ($/mt)	9,300	9,400	9,500	9,300	9,400	9,500
Gold ($/oz)	2,900	2,500	2,100	2,600	2,300	2,000
Iron ore ($/dmt)	100	90	90	100	90	90
Nickel ($/mt)	16,000	16,500	17,000	16,000	16,500	17,000
Zinc ($/mt)	2,700	2,700	2,700	2,700	2,700	2,700
*Newcastle. dmt--Dry metric ton. mt--Metric ton (1 metric ton = 2,205 pounds). oz--Ounce. Source: S&P Global Ratings.

The relative stability in our price deck assumptions belies significant market volatility. As the U.S. and other countries announced, implemented, and suspended tariffs, many industrial metal prices fluctuated by 20%-30%. While such volatility is not unusual in commodity markets, the global economy and metal markets remain exposed to significant uncertainties, not least about the enduring levels of tariffs.

Due to the current environment, we anticipate that industrial demand for metals will likely decline over the next 18 months. We understand that less predictable operating conditions for companies across value chains typically disincentivize investment.

Tariff Suspense Persists

The breadth and materiality of the current tariff policies has global effects, not least as the U.S. imposed a minimum 10% tariff on all trading partners. Further, the trade policy framework is unclear and could entail more counter and stimulus measures. To date, the number of tariff-related announcements by the current Trump administration reportedly exceeds 50. Nonetheless, the magnitude and timing of shifts in demand patterns for different metals is uncertain.

We see downside risks to our price assumptions, partly because supply curtailments in response to weaker demand are often delayed or not implemented. Additionally, shipments could be diverted if deliveries to the original destinations are no longer possible or financially attractive as a result of trade restrictions.

On the plus side, metal prices benefited modestly from the weaker U.S. dollar, which declined, on average, about 6.5% against a basket of currencies earlier this year. Even so, U.S. dollar fluctuations remain at the lower end of the 6% range that have prevailed since 2023. As part of our rating surveillance, we consider lower-price scenarios, especially for companies with refinancing or funding needs over 2025-2026, or with liquidity positions that mainly rely on ongoing cash flow generation from production.

As noted in the metal price deck update we published on March 5, 2025, U.S. domestic premiums for aluminum and iron products have risen broadly, in line with U.S. border tariffs. The uplift continues and we consider these premiums where appropriate in our modelling and analyses of U.S. companies.

Revised Prices

Metallurgical coal

We lowered our price assumptions for metallurgical coal for the remainder of 2025 to $190 per metric ton, reflecting subdued demand prospects in China. Chinese steel prices softened in March, amid weak domestic demand and negative market sentiment because of U.S. tariffs.

Since the local property sector remains subdued, we do not expect a near-term recovery in Chinese domestic steel demand. This, coupled with lower export prospects due to trade protectionism, could impair steel production. We now estimate Chinese steel production in 2025 will decrease by 3.7% to about 970 million metric tons. Steel exports from China will likely decline by more than 25% to about 80 million metric tons, down from 111 million metric tons in 2024.

While sluggish demand in China will likely weigh on seaborne metallurgical coal prices, robust demand from India offers a potential counterweight. On April 21, 2025, the Indian government imposed a 12% safeguard duty on steel imports for a period of 200 days. In anticipation of this duty, steel prices have increased by 10% since early March 2025. Rising prices will likely support Indian steel production and increase demand for metallurgical coal above 100 million metric tons in 2025.

Our price assumptions beyond 2025 remain unchanged at $200 per metric ton because we expect steel production in all regions but China will rise 2% in 2026 and 4% in 2027. India, Europe, and North America will account for the lion's share. That said, unforeseen supply disruptions due to adverse weather events and geopolitical conflicts could increase prices.

Thermal coal

We lowered our price assumptions for 2025 to reflect the tepid demand. Thermal coal prices declined in the first quarter of 2025 because weakened demand during a mild winter in Asia-Pacific led to oversupply in the market. Our price assumption of $105 per metric ton for the rest of 2025 exceeds spot prices. This is because we believe demand will moderately improve as a result of cooling needs in the summer. Key importers--such as Japan, South Korea, and Taiwan--will continue to import Australian thermal coal over the short term.

Although we expect the increase in demand for thermal coal in China will slow this year due to weaker economic growth and a shift to renewable energy, China's thermal coal imports will likely remain relatively high in 2025, following record highs in 2024. This is because seaborne coal prices will likely decline, while domestic output will be relatively stable before additional production capacity becomes available from 2026. Demand for lower-grade coal from India and other Southeast Asian countries will remain robust.

We lowered our price assumptions for 2026, in line with 2025. We continue to expect other energy sources, such as nuclear, will increasingly contribute to power generation and add pressure on coal prices.

Our price assumption for 2027 remains unchanged at $90 per metric ton. This is because we believe prices will ease as demand and supply continue to decline, in line with coal-importing countries' decarbonization targets.

Gold

We raised our gold price assumptions to $2,900 per ounce (/oz) from $2,600/oz for the remainder of 2025, $2,500/oz in 2026, and $2,100/oz in 2027. Gold prices have risen considerably to all-time highs over the past few months. The average price in April exceeded $3,200/oz, an increase of about 18% from the average in January. In our view, this rise mainly results from tariff-related trade tensions between the U.S. and its largest trading partners that increased volatility in U.S. equity and treasury markets and weakened the U.S. dollar.

Gold prices tend to benefit from such conditions because of the asset's perceived safe-haven status and possible hedge against inflation. Trade risks, which add to existing geopolitical risks and inflation concerns, contribute to the perceived status of gold as a safe haven. Our higher price assumptions over the next three years also reflect our view that geopolitical risks and uncertainty about trade policies, which we believe have intensified over recent months, could persist well beyond this year and lead to gold prices above $2,000/oz.

We assume gold prices will settle at $2,100/oz by 2027, considering the normal cyclicality. Since gold prices often decline after several years of record highs, we presently consider it unlikely that they will persistently exceed our expectations over a sustained period. Further, our longer-term price assumptions often align with gold producers' planning prices for investment decisions. Therefore, our assumptions for many commodity metals will often point down from peaks and up from troughs.

Although our higher price assumptions will strengthen the credit metrics of most gold producers we rate, we do not anticipate imminent rating actions for senior producers. That said, the credit profiles of several rated midsize gold producers whose financial risk profiles are more leveraged than those of peers will likely strengthen under our revised price assumptions, which could result in positive rating actions. Most senior gold companies benefited from several years of high prices that increased cash flows sharply and improved leverage.

Where producers distribute excess cash to shareholders, business risk or financial policy considerations constrain the rating upside. Price volatility and mining companies' high operating leverage could reduce their credit metrics additionally.

Unchanged Prices

Aluminum

Our aluminum price assumptions remain unchanged. Aluminum prices have declined by about 15% since mid-March 2025 due to worsening global economic sentiment and tariff-related uncertainty. Considering tight supply, volatility will likely persist in the face of a potential slowdown.

The outlook for the automotive sector is deteriorating as tariffs disrupt supply chains and increase prices, which affects consumer demand. While a decline in interest rates could benefit construction markets, rising inflation may delay any recovery. Global industrial activity--especially in China--remains low, although the demand for clean energy offsets some weaknesses.

Global premiums have diverged in response to tariffs. The U.S. Midwest Aluminum Transaction Premium surged on tariff announcements but declined as market uncertainty impaired buying activity. In the U.S., current premium levels continue to favor shipments from Canada over imports from other regions. Domestic scrap will likely represent the cheapest option to replace some aluminum imports.

Other regional premiums have declined sharply. In Europe, weak demand and concerns over a possible influx of Canadian aluminum are lowering premiums. In Japan, muted demand and U.S. tariffs on the automotive sector are affecting premiums.

We continue to anticipate sustained higher prices over the long term. Rising costs, specifically for electricity, could continue to constrain the aluminum supply chain. We expect supply deficits from 2026 as supply growth will slow and the role of aluminum in the green economy and energy transition will increase demand over the longer term.

Copper

Copper prices surged to $11,000 per ton in late March 2025, fueled by a weaker U.S. dollar. In April, they dropped sharply to $9,300 per ton, before recovering slightly above $10,000 per ton.

Copper prices are currently extremely volatile as trade tensions escalate and ease. We expect that copper fundamentals will remain positive and that our current price assumptions have room to improve. Yet it is hard to quantify the effect of trade tensions on economic activity and demand for metals.

If the U.S. economy enters a recession, prices may decline. Similarly, if the Chinese economy faces lower demand and must find new export destinations at a discount, metal prices will likely decrease, at least temporarily.

Iron ore

Our price forecasts for iron ore carry material downside risk, given the direct and indirect effects of tariffs by the U.S. and China. That said, our price assumptions remain at $100 per dry metric ton for 2025 because the effects of tariffs on trade are still uncertain. Our assumptions reflect our view that prices appear to have settled close to $100 per dry metric ton after the Chinese government announced stimulus measures in early March.

We estimate prices will trend down to $90 per dry metric ton in 2026, given an expected decline in China's steel output to about 960 million metric tons, from approximately 1 billion metric tons in 2024. Weaknesses in the key property market remain a drag on steel demand. China's dominance as the largest global steel producer means iron ore prices will heavily rely on Chinese demand.

Supply-side risks will emerge over the next 24 months. Apart from an incremental rise in supply from major iron ore producers, Rio Tinto Group's Simandou project in Guinea will also increase supply over 2026-2027.

Nickel

Our nickel price assumptions over 2025-2026 remain unchanged, after prices recovered rapidly from a roughly 10% dip in early April 2025. It is still unclear how weakening economic conditions will affect demand in an already oversupplied market. At present, about 25% of nickel production is barely covering cash costs, which means supply could reduce in case of consistently lower prices. Our price assumptions beyond 2026 also remain intact as we continue to expect tightening supply over the coming years.

Zinc

Considering the current market conditions, we maintain our zinc price forecast of $2,700 per metric ton over our assumptions horizon, despite recent price drops and ongoing market turbulence.

The recovery in the supply of zinc concentrate, which resulted from mine restarts and increased imports, is currently outpacing demand. This is particularly the case as China's property sector struggles and manufacturing activity in Europe and the U.S. remains sluggish. However, a significant production cut announced by Nyrstar, which accounts for approximately 5% of global supply, could lead to a quicker market rebalancing if other producers follow suit.

Rising spot treatment charges indicate an improved availability of raw materials that are necessary for smelting. Due to the low structural treatment charge of $80 per ton, however, smelters struggle to sustain profitability and might face production cuts. Additionally, trade tensions and tariffs could pose short-term risks to sentiment in the zinc market.

On the plus side, prices could benefit from a further softening of the U.S. dollar. Therefore, we believe the current price level will remain broadly resilient against macroeconomic fluctuations.

Related Research

• Economic Research: Global Macro Update: Seismic Shift In U.S. Trade Policy Will Slow World Growth, May 1, 2025
• Economic Research: U.S. Economic Outlook Update: Higher Tariffs And Policy Uncertainty To Weaken Growth, May 1, 2025
• S&P Global Ratings Lowers Its Oil Price Assumptions On Potential Oversupply; Natural Gas Price Assumptions Unchanged, April 10, 2025
• Steel And Aluminum Tariffs Boost Prices For U.S. Metal Producers, Costs For Manufacturers, March 13, 2025
• Sector Review: China's Steelmakers Face 15%-20% Tariff-Driven Slump In Exports, March 12, 2025
• S&P Global Ratings Metal Price Assumptions: Holding Firm Through First Waves Of Tariffs, March 5, 2025
• Macro Effects Of Proposed U.S. Tariffs Are Negative All-Around, Feb. 6, 2025
• Credit FAQ: How S&P Global Ratings Formulates, Uses, And Reviews Commodity Price Assumptions, April 20, 2023.

Primary Contacts:	Simon Redmond, London 44-20-7176-3683; simon.redmond@spglobal.com
	Donald Marleau, CFA, Toronto 1-416-507-2526; donald.marleau@spglobal.com
	Annie Ao, Hong Kong 852-2533-3557; annie.ao@spglobal.com
	Anshuman Bharati, Singapore 65-6216-1000; anshuman.bharati@spglobal.com
	Richard P Creed, Melbourne 61-3-9631-2045; richard.creed@spglobal.com
	Mikhail Davydov, Madrid 971-54-581-6323; mikhail.davydov@spglobal.com
	Alessio Di Francesco, CFA, Toronto 1-416-507-2573; alessio.di.francesco@spglobal.com
	Clara McStay, New York 1-212-438-1705; Clara.McStay@spglobal.com
	Ben Murphy, London 442071760520; ben.murphy@spglobal.com
	Diego H Ocampo, Buenos Aires 54-11-65736315; diego.ocampo@spglobal.com