Commodity market trends: expect diversification, disruption, and strategic shifts in 2026

The global commodity landscape continues to be defined by complexity and change. Persistent volatility, regulatory pressures, and the accelerating energy transition have pushed energy traders, hedge funds, and corporates to reassess their strategies and explore new routes to value.

From shifting supply dynamics to geopolitical risks, we explore the trends set to shape commodity markets in 2026 and how trading businesses can adapt their commercial strategies and operations to secure sustained advantage in a dynamic environment.

Energy traders expand into metals

Driven by decarbonisation and electrification, many energy trading houses are aggressively expanding into metals. This move is not about broad diversification into all metals but a targeted play on those critical to the energy transition. Vast amounts of copper, in particular, will be required to build out electric vehicles, renewable infrastructure, and data centres.

Copper’s strategic importance has ignited a talent war and intensified competition for supply. Leading firms are deploying significant risk capital to secure positions and capture arbitrage opportunities. Recent high-profile hires, including Mercuria’s recruitment from Trafigura and Vitol’s hiring from large, established competitors, point to an escalating battle for expertise and market share.

Oil players move into power, gas, and LNG

Traditional oil majors and trading houses are pivoting toward power, natural gas, and LNG markets. This shift reflects both regulatory pressure and the pursuit of growth in cleaner energy segments. Adapting operating model and evolving functional and technical capabilities have been a focus for those delving deeper into physical power trading, especially organisations who chose to own and operate generation assets. LNG has emerged as a strategic bridge fuel, offering all-important flexibility amidst geopolitical uncertainty and volatile demand patterns.

Systems, controls, and risk management under scrutiny

As traders diversify across commodity classes and new geographies, operational complexity and risk exposure multiply. Firms must reassess systems, processes, and controls to effectively manage risk across different commodity classes. The contrast between concentrates and refined metals, for example, introduces new operational challenges that require robust compliance frameworks and advanced risk analytics.

Data-driven trading and the rise of AI

Firms are embracing data-driven strategies, leveraging AI and advanced analytics to optimise portfolios, forecast price movements, and identify dislocation opportunities across markets. Automated risk models, real-time market intelligence, and blockchain-enabled contracts are becoming standard tools for leading players. In parallel, the explosive growth of AI has created a feedback loop, driving increased demand for both power and copper as datacentres proliferate globally.

Hedge funds and corporates move into physical commodities

Beyond traditional trading houses, hedge funds and paper players are increasing their commodity exposure. Firms including Balyasny, Jain Global, and Qube have expanded into trading physical assets such as natural gas, electricity, and oil. While this move provides a pathway to diversification and the potential to monetise heightened price volatility, it also opens new risks. Without the operational depth, market access, and institutional knowledge of established commodity houses and energy majors, firms may struggle to secure the influence, informational advantage, and execution capability needed to navigate the operational and market intricacies of commodity trading.

Commodity-intensive corporates, such as manufacturers and large-scale energy consumers, are also stepping up efforts to improve price risk management and supply chain resilience. These players are deploying sophisticated hedging strategies and exploring partnerships with trading firms to secure long-term supply.

Agricultural markets hit by further volatility and regulation

Agricultural commodities remain highly volatile, driven by weather disruptions, geopolitical tensions, and regulatory changes. The EU Deforestation Regulation (EUDR) is reshaping supply chains for coffee, cocoa, and palm oil, compelling companies to adopt stricter traceability and sustainability measures. Compliance costs are rising, adding another layer of complexity to procurement strategies.

Geopolitical risks and safe-haven commodities

Geopolitical uncertainty continues to influence commodity flows and pricing dynamics. Conflicts, trade disputes, and sanctions have created dislocation and arbitrage opportunities, particularly in energy and metals.

Meanwhile, gold and silver retain their status as safe-haven assets during periods of heightened risk and currency volatility. Over the past year, investors seeking safety and central banks making purchases drove a large surge in gold demand, while silver rose significantly. These are trends that should continue into 2026.

Decarbonisation taxes and regulatory pressures

The push for sustainability is accelerating regulatory intervention. Mechanisms such as the Carbon Border Adjustment Mechanism (CBAM) and European Market Emissions (EUME) are imposing fresh costs on carbon-intensive commodities. These measures aim to level the playing field but also increase compliance burdens, requiring firms to integrate carbon pricing into trading strategies.

Value chain resilience and optimisation

Supply chain resilience has become a strategic priority. Companies are investing in value chain optimisation, from upstream sourcing to downstream logistics, to mitigate disruptions and enhance efficiency. This includes diversifying suppliers, adopting flexible contracting models, and leveraging technology for real-time visibility.

Three imperatives to navigate commodity changes

Commodity markets in 2026 will be defined by fragmentation, innovation, and opportunity. To thrive in this environment, firms should focus on three core imperatives:

1. Diversify with discipline
   Expand into growth segments, such as transition metals and LNG, while maintaining rigorous risk controls. In lockstep, firms should secure the right talent and deploy supporting systems, which will empower them to navigate the complexities of new markets and commodity classes.
2. Transform digitally
   Harness AI, data analytics, and automation to gain a competitive edge in pricing, risk management, and compliance. However, making the most of these technologies requires robust data and digital foundations. Firms must invest in the systems, data architectures, and strategies that allow them to extract maximum value from analytical tools.
3. Sharpen sustainability and resilience
   Align strategies with decarbonisation goals, regulatory frameworks, and ESG expectations to secure long-term viability. This means embedding sustainability considerations into trading decisions and capital allocation. Resilience also requires robust scenario planning to anticipate and mitigate against regulatory changes, supply chain disruptions, and market fluctuations.

In commodity markets marked by complexity and disruption, adaptability remains the ultimate competitive advantage. From energy transition metals to agricultural compliance, tomorrow’s winners will be those who take steps today to anticipate change, embrace technology, and build resilient value chains.

Interested in learning more about the insights discussed in this article? Would you like to explore how Baringa can help you navigate the future of commodity markets? Please contact our team for more information.