Fragmented World Supports Raw Materials
A more volatile geopolitical backdrop is likely to underpin commodities markets in 2026, according to the Deutsche Bank Research Commodities Outlook published on January 26. Analysts argue that an increasingly fragmented global system – marked by great-power competition, resource nationalism and supply-chain redundancy – may exert a stronger influence on prices than traditional macroeconomic growth dynamics.
While the broader economic picture includes a potential re-acceleration in the United States and Germany, moderating growth in China and continued expansion in India, the research team believes structural geopolitical tensions could prove more decisive. Strategic stockpiling, shifting U.S. foreign policy priorities and a push for secure supply chains are expected to keep downside risks limited, particularly in energy markets.
Copper: Strategic Metal in Focus
Copper has started 2026 on firm footing. Supply disruptions in 2025, ongoing tariff concerns in the United States, demand linked to artificial intelligence infrastructure and supportive investment flows have all contributed to price strength. Although elevated prices have weighed on short-term Chinese demand since late 2025, U.S.-bound metal shipments could remain robust if tariff risks persist.
As both a cornerstone of the energy transition and a critical material for digital infrastructure, copper’s strategic status is deeply embedded in global industry. Deutsche Bank Research forecasts an average price of $12,125 per metric tonne in 2026, with a possible peak near $13,000 in the second quarter. Additional sector consolidation is anticipated given the metal’s importance to governments and corporations alike.
Aluminium: Transitioning Market Dynamics
The global aluminium market is navigating structural change following China’s production cap of 45 million tonnes introduced in 2017. As output growth from China moderates and demand outside the country improves, supply-demand dynamics appear supportive for higher pricing.
The research team projects a 2026 average of $2,925 per tonne, with potential highs around $3,100 in Q2. However, geopolitical variables such as a possible Russia-Ukraine ceasefire or renewed trade negotiations between the U.S., China and Canada could inject volatility into the market.
Iron Ore: Balanced but Vulnerable to China Policy
Iron ore surprised to the upside in the second half of 2025. Prices are expected to hold relatively firm in early 2026, with forecasts of $106 per tonne in Q1 and an annual average of $102.
Still, inventories at Chinese ports sit at their highest level since 2022, suggesting a market that could tilt toward surplus later in the year. Ongoing weakness in China’s property sector continues to dampen steel demand. Future policy actions aimed at managing steel overcapacity or supporting infrastructure investment will be closely monitored, given their direct impact on iron and steel consumption.
Crude Oil: Oversupply vs. Geopolitical Premium
After falling more than 18% in 2025, crude oil faces continued oversupply pressures as production growth outpaces demand. The U.S. Energy Information Administration estimates Brent crude could average $56 per barrel in 2026 and $54 in 2027. Deutsche Bank Research offers a slightly firmer outlook, forecasting $61.5 in 2026 and $65 in 2027.
Production gains are expected to reach 1.4 million barrels per day in 2026, driven largely by OPEC+, followed by further expansion from non-OPEC producers in South America in 2027.
Geopolitical tensions remain the primary upside risk. U.S. policy toward Iran and potential shifts in China’s strategic oil stockpiling plans could inject renewed volatility. Analysts suggest that if Beijing resumes inventory accumulation, buying activity would likely concentrate in the second quarter.
Financing the Resource Shift
Beyond pricing trends, the strategic repositioning of mineral supply chains is reshaping natural resources finance. Efforts in the U.S. and Europe to diversify away from dependence on China are increasing capital requirements and supporting structured financing solutions. According to Deutsche Bank’s natural resources division, demand for defense and energy-transition metals is driving renewed risk appetite and investment activity.
