As the global economy continues to adjust to shifting market dynamics, base metals are expected to face tight supply conditions throughout 2025. Analysts from Bank of America (BofA) and UBS anticipate sustained demand, especially driven by energy transition initiatives, even as uncertainties surrounding tariffs and global economic conditions persist.
Key base metals such as copper, nickel, and aluminum are poised to be among the most impacted, with supply constraints fueling price increases. With limited new production, the overall market is expected to remain tight, but steady demand, particularly in electrification and green technologies, will provide a counterbalance.
Copper: Constrained Supply Amid Rising Demand
Copper remains a focal point for 2025, with analysts forecasting a deficit due to constrained supply and consistent demand growth. BofA analysts pointed out that the copper mine project pipeline has been shrinking for years, exacerbating supply limitations. The diminishing supply is compounded by growing smelting capacities, which have driven treatment and refining charges to record lows.
Despite this, demand is expected to rise, particularly from the energy sector. UBS forecasts a demand growth rate of around 2.5% annually, driven by the ongoing electrification and infrastructure development efforts. However, traditional industries such as construction and manufacturing are expected to show only modest growth, with stabilization likely occurring in the latter half of the year.
The supply side remains a concern, with limited new copper production expected. UBS projects mine supply to increase by just 2% in 2025, further tightening the market. BofA predicts a supply shortfall of approximately 409,000 tonnes, with inventories dwindling to just 1.2 weeks of global demand. Prices for copper are expected to average $9,438 per tonne, reflecting the tight supply and robust demand.
Nickel: A Shift in Supply and Demand Dynamics
Nickel is also entering a period of transition, with regulatory changes in Indonesia expected to have significant implications for global supply. The Indonesian government has implemented measures to curb production growth, a move that could mark the end of years of supply surpluses.
BofA analysts highlight that the country’s decision to support smaller domestic miners may lead to a slowdown in nickel supply growth. While production is expected to rise by 9.5% to 4.1 million tonnes in 2025, consumption is projected to increase at a slightly slower pace of 8.3%, largely driven by stainless steel demand. Demand from the electric vehicle (EV) sector, however, is expected to slow due to shifts in battery chemistries.
Although a surplus is expected for 2025, analysts anticipate that supply-side constraints will limit future oversupply. With nickel prices under pressure in the near term, BofA forecasts an average of $16,750 per tonne. However, tighter regulations and reduced production growth may help balance the market in the coming years.
Zinc: Continued Supply Shortages
The zinc market is expected to face another tight year in 2025, with ongoing supply constraints driving prices upward. Although mine supply is projected to grow by over 5%, UBS analysts caution that a lack of capital expenditure (capex) in recent years will likely limit medium-term growth. This is particularly true outside of China, where new projects are scarce.
Zinc’s demand outlook is expected to remain stable, with moderate growth anticipated in sectors such as construction and transportation. However, its vulnerability to global economic slowdowns, coupled with limited influence from the energy transition, suggests that substantial demand growth is unlikely. Analysts predict a “robust medium-term fundamental outlook” for zinc, driven by continued supply tightness.
Aluminum: Deficit Forecast for 2025
The global aluminum market is set for a supply deficit in 2025, with limited smelter expansion potential in China and continued supply constraints related to bauxite and alumina. Despite these challenges, prices are expected to remain elevated, with BofA projecting a target of $3,000 per tonne.
Demand for aluminum is forecasted to grow, driven by factors such as vehicle light-weighting, packaging substitution, and the energy transition. However, UBS analysts predict that growth will moderate compared to previous years, forecasting a demand growth of approximately 2.5% in 2025, with a slight acceleration to more than 3% in 2026. This limited growth, combined with tight primary supply, will likely support aluminum prices above $2,500 per tonne.
Tin: Strong Demand Amid Supply Constraints
Tin is projected to remain one of the stronger performers among base metals in 2025, with demand set to increase due to the continued expansion of solar photovoltaic (PV) systems and the rising adoption of electric vehicles (EVs). BofA analysts forecast that tin prices will average $37,000 per tonne by 2026, supported by supply constraints and growing usage in green technologies.
Tin consumption is expected to grow by 3.5% in 2025, with the metal’s use in EVs and solar PV systems driving much of the demand. However, global production is expected to fall short of demand, further extending the market deficit. Factors such as the mining ban in Myanmar and production delays in Indonesia will make it challenging to boost supply. As costs rise, tin prices are likely to remain high, with the metal’s structural demand from the green transition projected to grow at a 14% compound annual rate through 2030.
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