Commodities Tracker - April Edition

This commentary covers the key takeaways for the listed commodities. Click the (x) next to the sectors to see the respective monthly charts pack.

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Past performance is not a guide to future performance.

Nuclear Energy & Uranium (x)

Energy Shock Reinforces the Case for Nuclear

• Long-term uranium prices continued their resilient rally in March, as Utilities companies’ purchasing remained robust despite macro uncertainty and inventories tightened.¹
• The latest energy security shock could strengthen the structural investment case for non-fossil fuel power mixes generally, with nuclear highlighted as a strategic way to cut exposure to oil and gas driven price spikes.²
• For uranium linked equities, prices fell likely due to tactical trading, rather than a damaged investment case.³ These companies have high valuations and had a very strong performance across the last 6 months, and therefore have fallen foul of broad-market degrossing and profit-taking.⁴
• A recent $40 billion U.S.–Japan investment push into small modular reactors coupled with supply-side disruptions tied to the Middle East conflict - especially the reduced availability of sulfuric acid for uranium extraction- adds to the case for tightening supply conditions ahead.⁵
• Brussels-based nuclear trade body Nucleareurope published an action plan detailing how EU policies can accelerate nuclear deployment, highlighting significant investment needs across both lifetime extensions and new builds, and advocating for an ambitious installed capacity of around 150 GW by 2050 – well above the European Commission’s current central projection of roughly 109 GW.⁶

Base Metals and Copper (x)

Copper Positioning Resets, Aluminium Shock Hits Supply and Leads Price Spike

• Copper sold off in March before rebounding strongly in early April as the Middle East conflict weighed on growth prospects despite resilient physical buying, as Shanghai and Comex inventories built significantly.⁷
• Speculative positioning fell from extreme highs, especially in Shanghai, where traders cut long exposure despite the large-scale net stockpiling in copper warehouses.⁸
• Copper’s 2-year futures premium to spot prices reached 25% on Comex, indicating that medium-term prices are flagging tightness in the physical market.⁹
• Separately, Barrick’s decision in late March to slow work on the Reko Diq copper gold project in Pakistan because of rising security risks adds another potential constraint on future mine supply, strengthening an already-strong fundamental picture for copper and, at the margin, deepening the supply deficits that are forecast for later in the decade.¹⁰
• Following the failed Iran-US negotiations, China has halted exports of sulphuric acid from May 2026, which copper production depends on in Chile, the DRC and Zambia.¹¹ This could lead to a supply shock in the near-term that may support physical copper prices.¹²
• Drone and missile attacks on major Gulf aluminium smelters, including Emirates Global Aluminium and Aluminium Bahrain, damaged facilities and disrupted output, taking an important source of global supply partially offline. This has a significant impact on aluminium prices, which rose by ~10% from March lows.¹³

Gold and Silver (x)

Deleveraging Weighs on Precious Metals, but Support is Likely Building Under the Surface

• Gold and silver fell through most of March, pressured by a stronger dollar, fading expectations of near term rate cuts, and forced selling as investors deleveraged after the Iran-related spike in volatility.¹⁴
• Higher long-term yields and a repricing of rate cuts kept a lid on traditional “war hedge” flows, meaning the geopolitical escalation did not translate into a robust rally in precious metals.¹⁵
• Rising inflation worries, continued conflict‑related fiscal spending and wider macro uncertainty, however, are all factors that tend to support monetary assets over the medium term.¹⁶
• China’s silver imports hit an eight year high at the start of 2026, driven by strong industrial demand from solar and grid-related sectors as well as retail bar buying, suggesting underlying usage remains robust despite price volatility.¹⁷

Critical Minerals, Battery Tech & Lithium (x)

Battery Demand Strengthens as War Risk Highlights the Need for Renewables to Scale

• Physical lithium prices pulled back modestly in March, as leading producers including SQM, Albemarle, and Ganfeng issued guidance for significantly stronger lithium demand in 2026, citing EVs and rapidly growing grid‑scale energy storage as key drivers.¹⁸
• The current energy inflation shock has highlighted that battery as a means of grid-scale storage is a strategic imperative.¹⁹ Lithium-ion batteries are increasingly being paired with renewable sources of power to manage intermittent generation inherent to the majority of renewables, a trend that could accelerate as a reaction to high energy prices.²⁰
• The UN called for “fair play in the global race for critical minerals” and explicitly warned that surging demand for critical minerals for EVs and renewables is fuelling geopolitical competition, calling for stronger governance and fairer benefit‑sharing.²¹

Oil and Gas (x)

War Risk Drives Volatility on Top of a Backwardated Curve

• Brent and WTI both spiked sharply on the Iran/Hormuz escalation, with Brent briefly above roughly USD 110–115/bbl and WTI also surging before retracing part of the move after the announced ceasefire, leaving a visible war‑risk premium in front‑month pricing.²²
• Subsequent reportedly-failed follow‑up talks and continued uncertainty around Hormuz have kept a visible war‑risk premium in spot pricing and a steep backwardation versus deferred contracts.²³
• European gas (TTF) has also moved significantly higher, with prices at one point doubling in 48 hours and recording weekly gains of about 50%, as LNG flows via Hormuz came under threat and traders rushed to re‑hedge supply risk.²⁴
• In contrast, U.S. Henry Hub gas prices are lower than earlier in the year, with the summer 2026 strip drifting down towards the low USD 3s/mmbtu and official forecasts now pointing to a slightly lower average price in 2026 versus 2025.²⁵
• This divergence reflects robust U.S. production and comfortable storage, and follows a sharp January–February weather‑driven spike that has since unwound as extreme‑cold risk faded and positioning was de‑grossed.²⁶

This document is not intended to be, or does not constitute, investment research as defined by the Financial Conduct Authority.