Summary

Ian discussed how the Iran conflict is affecting commodity markets, arguing that the duration of the disruption matters more than anything else. His main point was that markets had been too relaxed about the risks, particularly compared with Asia, where concerns over gas, oil and power shortages were already much more acute. He suggested that even if demand weakens, damage to supply chains could still leave several commodity markets structurally tight. He was most positive on aluminium, which he saw as the clearest beneficiary because so much smelting capacity sits around the Strait of Hormuz. He also saw coal as a likely winner if LNG shortages persist, and described iron ore as relatively defensive, with limited downside and some upside if supply disruptions worsen. By contrast, he was more cautious on copper, lithium and nickel, where weaker global demand and excess supply could weigh on prices despite stronger longer term themes. He also stressed that India looks especially vulnerable, with gas shortages already disrupting industry and threatening what had been an important growth driver for metals demand. China, by contrast, was seen as more resilient in the near term, supported by better energy buffers and continued green investment, though it would still be hit if the conflict dragged on and emerging market demand deteriorated.

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