The mining rally in 2025 was led by precious and base metals, with gold miners up roughly 150% year-to-date, and prices for gold, silver, and copper all at record highs.
While traditional cyclical drivers, such as improving PMIs and broadly balanced supply/demand dynamics, remain relevant, the current upcycle is more complex. A weaker US dollar, constrained supply growth, and resilient end-use demand all matter, but an increasingly important, durable, and still underappreciated driver is the global push to secure supplies of critical minerals. In particular, the US has moved decisively, as it recognises that heavy reliance on China for these materials represents a strategic vulnerability.
We believe strategic stockpiling is emerging as a rational and lasting response to geopolitical fragmentation, trade tensions, and highly concentrated supply chains. Unlike traditional cyclical demand, this form of demand is intended to provide supply certainty in the event of disruption, whether from government actions, trade restrictions, or geopolitical conflicts, and is therefore largely insensitive to the macroeconomic cycle.
NORMALISED KEY COMMODITY PERFORMANCE 2025
China dominates the majority of refined metal production globally. While its control of critical rare earths has drawn the most attention, China also accounts for more than 50% of global consumption of many mined minerals, which it processes into refined metals and manufactured products for re-export. Key economic systems, including power grids, defence equipment, data centres, vehicles, and household appliances, are fundamentally dependent on these materials. As a result, access to metals has become a national security issue, reinforcing the imperative for advanced economies to secure strategic resources without excessive dependence on China.
The US has taken the lead in this strategic agenda, classifying 60 minerals as critical (covering roughly 80% of mineable commodities) and committing substantial capital to developing domestic and overseas supply chains with key allies, such as Australia. Its tariff policies (50% on steel and aluminium) are also intended to develop domestic supplies and underpin prices. Copper is worth highlighting, as a Section 232 review is under way that will likely result in tariffs and, as a consequence, US inventories have risen sharply, front-running tariffs, drawing down global exchange stocks, and pushing prices to record levels. This stockpiling appears ‘sticky’, supported by contango structures even in an already tight market, implicitly forming a strategic stockpile rising from 72 kt at the start of 2025 to around 440 kt in early January.
At the same time, supply across many commodities remains structurally constrained. After a prolonged 2012–2020 downward cycle, new mine development has been limited, while ESG requirements, financing hurdles, and delays in permits continue to restrict the pace of new capacity additions.
Crucially, strategic demand is additive rather than cyclical. Electrification, grid expansion, data centres, electric vehicles, defence systems, and reshoring initiatives all require substantial volumes of metals, and governments appear willing to tolerate higher input prices given metals’ relatively small contribution to final product costs. With new mine supply often requiring 15–25 years to develop and existing assets gradually being depleted, strategic stockpiling is pulling demand forwards that might otherwise have materialised later. As a result, even if PMI-driven industrial demand softens, government-led stockpiling and resource-security policies are likely to underpin supportive commodity market conditions into 2026 and beyond.
Read our Investment Outlook 2026 for more insights.
The financial instruments and investment strategies portrayed in this document are for informative purposes only. They may differ from those effectively held in an investor’ portfolio. Depending on the jurisdiction and investment profile, one or some of these instruments and strategies – including, where applicable, options – may not be permitted, available or suitable. The opinions expressed herein are correct as at 19 January 2026 and are subject to change without notice. Any forecast, projection or target, where provided, is indicative only and is not guaranteed in any way.
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