A Strategic Shift for the iShares Metals & Mining ETF

The iShares MSCI Global Metals & Mining ETF surges as corporate strategy shifts and AI-driven copper demand clash with near-term inventory gluts, fueling a complex commodity outlook.

The iShares MSCI Global Metals & Mining Producers ETF (PICK) has enjoyed a robust start to the year, posting an 18.5% gain through mid-February. This performance comes amid a period of significant strategic realignment for key industry players and a complex fundamental backdrop. The sector's resilience, fueled by the global energy transition, is now being tested by recent market volatility and internal corporate restructuring.

Fundamental Strength Amid Corporate Restructuring

A major development shaking the sector is the profound transformation underway at Anglo American. The mining giant recently released its figures for the 2025 fiscal year, reporting revenue of $18.5 billion and an operating profit (EBITDA) of $6.4 billion. Despite these results, the market reaction was tepid, with shares declining 2.3% in early trading. The primary catalyst for this negative sentiment was the company's decision to slash its total dividend for 2025 by a substantial 64%.

Anglo American's strategic pivot is clear. While non-cash impairments of $2.3 billion related to its De Beers diamond business weighed on results, the company is aggressively refocusing its portfolio on copper and high-quality iron ore. A planned merger with Teck Resources is central to this strategy, aiming to significantly expand its copper production capacity by 2028.

The Copper Conundrum: Inventory Glut vs. AI Demand

The copper market currently presents a mixed picture. After hitting record price levels in January, a buildup in inventories—reaching their highest point since 2003—triggered a price correction. However, analysts at Deutsche Bank maintain a bullish outlook, forecasting an average price of $12,125 per ton for 2026. This optimism is driven by projected massive demand from the expansion of data centers and applications powered by artificial intelligence.

In a related regulatory development, a U.S. Supreme Court ruling has limited the authority to impose blanket tariffs. It is important to note, however, that existing special tariffs on steel, aluminum, and copper, which are based on national security interests, remain unaffected by this decision.

Critical Minerals Take Center Stage

A broader sectoral shift is emphasizing so-called critical minerals. BHP recently reported that copper has now overtaken iron ore as its primary earnings contributor, highlighting the growing importance of industrial metals essential for global electrification. This trend persists even as other major consolidation efforts, such as the proposed Rio Tinto and Glencore merger, failed to materialize earlier this month.

Despite short-term price fluctuations, fundamental indicators continue to point toward a sustained commodity supercycle. The combination of structural supply deficits and the massive build-out of digital infrastructure is expected to provide crucial support for industrial metal prices throughout the remainder of the year.