Material Matters: Commodities In 2026

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A glance through the latest expert views and predictions about commodities: 2026 outlooks for oil & gas, base metals, minerals and gold.

By Greg Peel

Oil & Gas

For 2026, ING commodity analysts remain bearish towards energy markets, with the global oil market set to be in large surplus following OPEC-Plus rapidly ramping up output as it shifts policy, while demand growth remains modest.

There is plenty of uncertainty about Russian oil supply following US sanctions, but as we move through 2026, markets are expected to get a clearer picture of the full impact.

For now, ING believes the impact will be limited in the medium to long term. However, there is potential for greater volatility, given OPEC’s spare production capacity has shrunk as the group has increased output.

While there are some short-term upside risks for the European gas market, it’s set to become better supplied, ING notes, despite the region’s plans to phase out Russian gas and LNG.

The start-up of LNG export capacity, particularly from the US, will leave global LNG markets and the European gas market increasingly more comfortable. Though the ramp-up of US LNG exports risks leaving the US gas market tighter.

Developments related to Russia-Ukraine peace talks will also be important to watch in 2026, with any progress towards ending the war likely to put further pressure on energy markets, ING points out.

Metals

China’s November commodity demand metrics showed further deterioration, UBS notes. Retail sales significantly underperformed expectations, marking the weakest result in three years, while the downturn in the property sector worsened.

Sustained weakness from here may present downside risks to demand expectations and prices, especially given economic decision-makers in China may delay policy until the 15th Five-Year Plan is finalised in March 2026.

Retail sales were weaker, rising 1.3% year on year versus 2.9% prior, well short of 2.9% consensus, on a combination of 1) fading consumer subsidies, 2) weak demand for durable goods, and 3) ongoing property market weakness reducing wealth and confidence.

When paired with further weakness in Industrial Production (up 4.8% year on year versus 4.9% prior), China’s consumption prospects seem muted.

The slowdown has weighed significantly on investor sentiment for base metals, particularly in light of the emphasis placed on boosting domestic demand during the recent 4th Plenum.

With internal consumption increasingly fragile, UBS sees significant near-term macro risks for industrial metals. Downside could present should economic trends continue, while upside could emerge should China meaningfully stimulate.

UBS believes any stimulus is likely reserved for 2026, aligning with commencement of the 15th Five-Year Plan.

ING nonetheless believes most base metals are likely to remain well supported next year. Uncertainty over US refined copper tariffs will likely continue to see strong refined copper flows to the US, tightening up the ex-US market.

This coincides with a persistently tight copper concentrate market.

For aluminium, the market is focused on China approaching its production cap, along with several producers elsewhere considering closures due to high power prices. ING believes the aluminium market will be tight in 2026.

For nickel, ING expects little change amid persistent surpluses, keeping prices under pressure.

UBS notes Chinese EV output remained stable in November at 17% year on year growth. UBS believes battery raw materials demand will accelerate, especially given strength in EVs and a forecast surge in battery energy storage system (BESS) demand.

Minerals

China’s property weakness accelerated in November, UBS notes, with housing starts down -21% year on year and sales down -9%, and the real estate climate index again down.

Crude steel output in October was down -11% year on year while iron ore port inventories are up 4% month on month.

While iron ore prices have recently been well supported on a range of factors, the ramp-up of Rio Tinto’s ((RIO)) Simandou mine, steel production in China’s north likely to be managed through the winter, and China steel export licensing to take effect on January 1, UBS believes iron ore pricing could come under pressure into early 2026.

China’s 6% month on month rise in coal production and imports in November, alongside stable coke production, likely reflects a thermal-led demand push, driven by power demand rather than steel-making requirements, UBS suggests.

Flat month on month coke production and slowing daily steel output underscore subdued blast furnace activity, consistent with ongoing weakness in property and construction.

This divergence implies coal supply is increasing without a corresponding uplift in steel demand, and together with expectations for increased supply in the first half of 2026, UBS remains cautious the met coal outlook.

Gold

Precious metals have been the standout in 2025, ING reminds us, with gold repeatedly hitting record highs throughout the year.

Uncertainty over trade policy also led to distortions in the gold market. While heightened geopolitical risks, falling real yields, and a weaker US dollar all proved supportive of gold investment demand, central banks continue to make strong purchases, a trend that has been clear since the freezing of Russian assets following the Russia/Ukraine war.

Citi has maintained its call for “peak gold” in the March quarter of 2026, with a pullback of the gold price expected later in 2026 driven by cyclical drivers such as lower US tariff and inflation fears and stronger US growth sentiment.

That said, Citi notes the gold price will be supported by structural drivers such as concerns over US debt, US dollar status and Fed independence.

To that end, ING expects gold prices to remain strong and reach yet new heights. With the Fed set to cut rates and the US dollar likely to remain under pressure, this should be constructive for investment demand, while central banks are likely to continue adding to their reserves.

Gold Equities

Citi has upgraded its earnings forecasts for gold companies by 20-30% in 2026/27 on the back of an increased long-term gold price to US$3,200/oz from US$3,000/oz. Target prices have been lifted accordingly.

Citi estimates gold equities are pricing in US$2,950-3,650/oz on spot FX versus a spot gold price of US$4,200/oz.

Citi’s updated view is that over the last year, Northern Star Resources ((NST)) has been outperformed by Evolution Mining ((EVN)) to the extent it is now the value buy over Evolution. Year to date, Evolution’s share price is up 155% against Northern Star up 73%.

This is due, Citi suggests, to Northern Star’s ‘s increase in capex expectations and inability to meet guidance (Citi expects the miner to miss production guidance in FY26).

Under the broker’s base case, Evolution has a price to net asset value multiple (P/NAV) of 1.35 versus 1.05 for Northern Star, which would factor in an historically poor performance from Northern Star versus Evolution.

The P/NAV gap is believed to have reached the point where the cheapness of Northern Star outweighs the comparatively stronger historical operational performance of Evolution.

Citi also thinks looking forward there is more potential for Northern Star to re-rate if it can meet future guidance.

Both stocks remain Neutral rated.

Outside the ASX50, Greatland Resources ((GGP)) is Citi’s preferred exposure and carries a Buy rating. Greatland has a low P/NAV amongst Citi’s coverage of 1.03, and the analysts like the organic growth opportunities at Telfer.

Genesis Minerals ((GMD)) is upgraded to Buy, driven by the broker’s upgraded gold price deck. Additionally, with the rail agreement now signed for Tower Hill and gold price at around US$4,300, Genesis is expected to achieve its “Aspire 400 strategy” target of 400koz by FY29.

Perseus Mining ((PRU)) remains a Neutral/High Risk and Regis Resources ((RRL)) remains a Sell.

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