Archive · 5 Aug 2026
Middle East shock spares metals from worst but risks deepen
Something bad happened in the Middle East that could have hurt the companies that dig up metal from the ground.
Worried experts thought that a metal called aluminium would be very hard to find, with millions of tonnes missing.
It turns out things were not that bad, and now they think only about 900,000 tonnes will be missing.
This is because companies learned how to stay strong after other big problems, like the Covid-19 pandemic.
But there are still worries.
Half of the world's sulphur, which is used to make some metals, cannot be delivered.
Making steel is getting harder, and making things costs more money.
Another metal called copper should have extra supply this year, but prices are still high.
The experts say the next big thing to watch is the US mid-term elections.
Wood Mackenzie cut its projected 2026 aluminium supply deficit to 900,000 tonnes from an initial estimate of 2.5-3 million tonnes.
About half of global sulphur supply has been disrupted, intensifying pressure on copper and nickel production, including in the Democratic Republic of Congo and Australia.
Copper is still expected to move into a surplus in 2026, though tariff-related inflows into the US continue to support prices.
Around 32% of global direct reduced iron production was affected by the conflict, while global steel demand is weakening in the near term.
Wood Mackenzie warns of depleting inventories, mounting cost pressures and deferred investment decisions threatening a more difficult second half of 2026.
- Who
- Wood Mackenzie, the global natural resources consultancy, which conducted the mid-year review, and Peter Schmitz, its director of global markets research.
- What
- The metals and mining sector absorbed the Middle East conflict's direct shock better than expected, with the projected 2026 aluminium supply deficit cut to 900,000 tonnes, though disruptions to sulphur, copper, iron and steel persist.
- When
- Mid-2026, covering full-year 2026 forecasts and warning of a more difficult second half of 2026.
- Where
- Globally, centred on the Middle East conflict, with production impacts cited in the Democratic Republic of Congo, Australia, the United States and China.
- Why
- Supply-chain resilience built during the Covid-19 pandemic and repeated trade disruptions helped the sector cope, though trade frictions and the conflict are adding to inflation and weakening global growth.
- Consultancy
- Wood Mackenzie
- Projected 2026 aluminium deficit
- 900,000 tonnes (down from an initial 2.5-3 million tonnes)
- Global sulphur supply disrupted
- About half
- Direct reduced iron production affected
- Around 32% of global output
- Copper market outlook
- Expected surplus in 2026, with US tariff-related inflows supporting prices
- Key risks for H2 2026
- Depleting inventories, rising cost pressures, deferred investment decisions
- US Federal Reserve
- Kept interest rates unchanged amid inflation concerns
- Next market milestone
- US mid-term elections (2026)