Key Commodity Trends to Watch in 2025

Commodity prices are expected to decrease on average in 2025 due to ongoing economic slowdowns across the world.

While oil prices are expected to fall, due to a slowdown in demand growth and an increase in production, natural gas prices will likely rise as countries across the globe continue to rely on LNG as a “transition fuel”.

The demand for critical minerals is expected to continue rising, however, this may not be reflected in all commodity prices. The race to expand lithium production has led to an oversupply of the mineral, which is expected to eventually shift to a shortage as EV uptake increases sharply over the coming decades.

Meanwhile, the demand for copper is expected to grow overall, as several countries increase their demand in line with the expansion of their renewable energy industries. However, China, which drives copper demand, will likely contribute to a smaller-than-anticipated role in the copper market due to its ongoing economic slowdown.

Oil

Oil prices fell in 2024 as demand in China fell while crude production rose worldwide. China is the world’s biggest oil importer and the second-largest consumer, contributing around 15 percent of global demand. However, its consumption contracted in 2024 due to slowing economic growth following the COVID-19 pandemic, the rollout of widespread renewable energy projects, and greater electric vehicle (EV) uptake across the country.

In the International Energy Agency’s (IEA) November Oil Market Report, the organization predicted that global oil demand will increase by almost 1 million bpd, compared to nearly 2 million bpd in 2023. This, the IEA suggests, is largely owing to “the slowdown in growth from recent years reflect the end of the post-pandemic release of pent-up demand and below-par underlying global economic conditions, as well as clean energy technology deployment”.

Experts expect the Brent benchmark could fall to below $70 a barrel this year due to the ongoing economic troubles across the globe and the increase in supply. In 2024, the U.S. produced an average of 13.2 million bpd of crude throughout 2024, surpassing the previous record of 12.9 million bpd set in 2023. With production expected to keep growing under the new Trump administration, there will likely be a supply glut, driving prices down.

Gas

While oil prices are expected to fall in the coming year, gas prices are more uncertain. Gas prices have risen in recent weeks due to higher demand in the winter months and other factors. Ukraine’s halt of Russian gas exports to Europe at the beginning of the month has made the outlook more uncertain. The move drove gas prices up, but this could quickly change if Ukraine decides to once again open its export links.

A recent BMI forecast suggests that gas prices could rise by around 40 percent this year, to $3.4 per million British thermal units (MMbtu) compared to an average of $2.4 per MMbtu in 2024. This will be largely driven by increased demand in the LNG sector and higher net pipeline exports.

With gas being viewed as a transition fuel in several parts of the world, demand for the fossil fuel remains strong. Europe and Asia are driving the demand growth, and the U.S. is happy to respond, with several new LNG projects expected to come online in 2025. The U.S. Energy Information Administration (EIA) expects the country’s LNG exports to increase by 15 percent this year, reaching almost 14 billion cubic feet per day (Bcf/d).

Lithium

In 2024, lithium production grew rapidly, while the growth in demand for the critical mineral slowed as automakers reined in their EV manufacturing ambitions due to lower-than-expected consumer uptake. The surplus seen last year is expected to fall in 2025, from 84,000 mt of lithium carbonate equivalent to a 33,000 mt surplus. It will likely continue falling through 2027 as EV uptake increases and the global race to expand lithium production slows.

Rick Anton, the Chairman of U.K.-based Savannah Resources, said he’s optimistic about a rebound in the lithium market. Anton explained, “My confidence in this recovery is sustained due to the lithium market’s secure foundation, which is built upon emission reduction-related legislation in all major global markets and the established position that lithium-ion batteries have achieved as the energy storage technology of choice for multiple applications.”

Copper

China, which consumes around half of the world’s copper output, experienced an economic slowdown in 2024 that contributed to a fall in the demand for copper. However, the increase in advanced manufacturing and clean energy activities worldwide is expected to contribute to a rise in demand in the coming years. Global copper mine production increased by around 5 percent in 2024, driven by expansions and new projects, as companies worldwide prepare for the growth in long-term demand driven by the global green transition.

Copper prices are expected to average $9,477 per tonne in 2025 and rise to $9,690 a tonne the following year. The faster-than-expected deployment of renewable energy in several countries, as well as accelerated global infrastructure spending and delays in major mining projects, could contribute to price shifts in the coming years.