World Bank Sees Metals Prices Leading Commodity Surge as Middle East Disruption Tightens Supply

Metals markets are set to play a central role in the next phase of global commodity inflation, with prices expected to rise sharply in 2026 as supply constraints and geopolitical disruption continue to reshape trade flows, according to the latest outlook from the World Bank.

The institution forecasts that global metals and minerals prices will increase by around 17% this year, contributing to a broader 16% rise in overall commodity prices. It would mark the first annual increase in commodity values since 2022, driven largely by tighter supply conditions and sustained industrial demand.

The World Bank said precious metals are expected to lead the rally, with prices projected to surge 42% in 2026 to record highs. The gains reflect heightened geopolitical uncertainty, alongside stronger demand for safe-haven assets.

Base metals are also expected to remain firm. Aluminum, copper and tin markets are being supported by what the bank described as “inelastic short-term production” and continued demand from electrification, infrastructure and data-intensive industries.

The metals and minerals price index rose 13% in the first quarter of 2026 and extended gains into April. The World Bank linked the upward pressure to supply concerns stemming from Middle East tensions, including disruptions affecting energy and industrial input markets that feed into metal production costs.

Aluminum is expected to see some of the most pronounced effects, given the region’s role in global supply chains. Prices for the metal are projected to rise by about 22% this year, while copper is also expected to post strong gains amid tight inventories and steady demand growth.

The bank noted that the broader commodity basket is currently trading about 25% higher than January expectations, reflecting the speed at which geopolitical risks have filtered into pricing across energy, metals and fertilizers.

In energy markets, which remain closely linked to metals production costs, prices are forecast to rise 24% in 2026, while fertilizer prices are projected to increase 31%, adding secondary pressure on mining and industrial inputs.

The report described metals pricing as highly volatile in early 2026, with movements largely driven by supply disruption concerns tied to escalating geopolitical tensions in the Middle East, including conflict-related risks affecting trade routes and regional production hubs.

Despite near-term strength, the World Bank expects metals prices to decline around 7% in 2027 as supply conditions normalize and new capacity comes online. However, it warned that risks remain tilted to the upside, particularly if industrial demand proves stronger than expected or if supply disruptions persist.

Potential downside risks include weaker global growth, especially in China, which could weigh on the consumption of industrial metals used in construction and manufacturing.

Source: World Bank Group

SUNSHINE Spotlight: Metals markets are emerging as a key transmission channel for geopolitical risk, with tight supply conditions and industrial demand driving a broad-based price upswing into 2026.