Metals demand in the global industrial economy has been soft since November, despite rising prices across most metals over the past year and manufacturing expansion at its highest level since May 2024.
More than half of major developed and emerging economies showed manufacturing expansion at the end of 2025, BMO Capital Markets noted on Thursday. That was likely driven mostly by monetary easing in several western economies, and more certainty on United States tariffs after the U.S.-China trade deal in November.
“That said, this is not yet translating into metal demand, with study group data suggesting sluggish demand for Chinese crude steel, copper, and zinc in November and December,” BMO Capital Markets commodities analyst Helen Amos said in a note.
Metals demand remains tepid because metals purchasing by end users hasn’t followed an uptick in manufacturing, and Chinese construction – a key source of steel and base metals consumption – has been declining. Meanwhile, metal prices are high due to tight supplies and not from strong demand.
The bank’s analysis is in line with its previous assessment in late 2024, when it lowered its metal demand estimates for 2025 due to anticipated higher tariffs just before U.S. President Donald Trump’s inauguration and global trade difficulties.
