Global Metals Demand Lags Despite Price Surge, Says BMO
Aluminum | 2026-02-02 05:46:10
Muted end-user purchasing and a prolonged downturn in Chinese construction have weighed heavily on demand.
By Paul Ploumis
SEATTLE (Scrap Monster): Global metals demand in the industrial economy has remained soft since November, even as prices for most metals climbed sharply over the past year and manufacturing activity expanded to its strongest level since May 2024, according to BMO Capital Markets.
More than half of major developed and emerging economies recorded manufacturing expansion by the end of 2025, supported largely by monetary easing in Western economies and improved certainty around U.S. tariffs following the US-China trade deal in November. However, this recovery has yet to translate into stronger metals consumption. BMO noted that study group data point to sluggish demand for Chinese crude steel, copper, and zinc during November and December.
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Muted end-user purchasing and a prolonged downturn in Chinese construction have weighed heavily on demand. Meanwhile, elevated metal prices are being driven primarily by tight supply conditions rather than robust consumption. Copper surged around 50% to $5.89 per lb, and zinc gained roughly 15%.
Despite weak construction trends, the automotive sector emerged as a bright spot. Global light-vehicle sales reached 91.7 million units in 2025, the highest since 2019, while electric vehicle sales jumped 20%. BMO expects renewed auto-sector momentum to become a key driver of metals demand in the year ahead.
POLL
What is currently supporting elevated metals prices despite weak demand?
Frequently Asked Questions
- Why has metals demand remained weak despite strong manufacturing activity?
Weak Chinese construction, muted end-user purchasing, and regional economic imbalances have restrained actual metals consumption.
- Which metals showed strong price gains in 2025?
Copper surged roughly 50% to $5.89/lb, while zinc gained about 15%, largely due to supply constraints.
- How did automotive and EV sales perform in 2025?
Global light-vehicle sales reached 91.7 million units, the highest since 2019, with electric vehicle sales up 20%.
