Iran war: markets have a short memory for conflict and a long memory for consequence
It’s likely that the Iran war will fade from the front pages, but what it accelerated will not.
Every region of the world is now mobilising for two things at once: defence and AI. Both are metals-intensive. Both are running into the same supply wall. The read-through for ASX-listed resources, particularly small-cap developers, is the most constructive setup we have seen in over a decade.
The bull market is already moving
The signals are no longer subtle, with the S&P GS Industrial Metals index at all-time highs and the MSCI Global Metals ex-Gold e-x Silver IMI Index breaking to a new interim high, with momentum accelerating into 2026 (Source: MSCI). The ASX 300 Resources index is breaking out of a five-year range relative to the ASX 200. Iron ore is climbing despite consensus calling it lower.
The long-duration relative charts tell the clearest story. BHP has only marginally outperformed the S&P 500 over 26 years. Freeport has barely outperformed. Copper has underperformed the broader index over the period despite reaching record nominal highs in May 2026. The base is wide and the move has barely started.
Chart: Relative performance of ASX 300 Resources vs ASX 200 Index
Five Impacts that compound
The war and the AI buildout are themes that feed the same demand curve.
- More EVs, more battery energy storage, more electrification. The US has run out of room to hedge on lithium and battery supply chains, so a policy pivot is one headline away.
- More drones and robots, which means more and better batteries, more specialty alloys, more critical minerals.
- Better and more weaponry, which is critical-minerals-intensive by definition.
- More data centres and AI infrastructure to run the drones, direct the munitions, and train the models (that is, steel, copper, aluminium, and battery inputs at scale).
- Less oil consumption over time as internal combustion demand wanes.
Every one of these vectors lands on the same periodic table.
Lithium is the cleanest expression
Lithium sits at the intersection of EVs, stationary storage, drones, and robotics. The recent quarterly commentary is doing the work for us:
Recent quarterlies are doing the work. Albemarle reported continued inventory drawdowns in Q1, with stock levels trending lower through the cycle. Mineral Resources reported sold tonnes above US$2,500/t before spot indices caught up, with management flagging demand strength and supply struggling to keep pace. Core Lithium capitalised on tightening markets by selling 20,000 tonnes of lithium fines to Glencore as opportunistic buying drives the first DSO activity since the 2016/2017 cycle.
Liontown is reporting physical tightness with inventories well below one month. Added to this, IGO downgraded Greenbushes FY26 guidance by 10%, a material cut from the world’s largest lithium mine, and lost its CFO in the same window.
South Korean and Japanese offtakers are approaching Australian juniors directly because they cannot secure supply through conventional channels. The market is tightening in front of consensus, not behind it.
Where the value sits – lithium, copper, gold, silver, rare earths, tungsten and tin
The developer end of the lithium curve is where the asymmetry lives. Producers will rerate. Developers with quality assets, jurisdictional advantage, and proximity to existing infrastructure will rerate harder.
Across copper, the story is similar. The bellwether names have lagged the commodity. Capstone is roughly 25% below its highs while copper printed a fresh all-time high above 664¢/lb on COMEX and over $14,500/t on the LME this month. Developers with viable, permittable projects in friendly jurisdictions are scarce and getting scarcer.
Gold is the trade that has already worked, and the one most investors are now underweight relative to where it sits. North American producers have led. ASX-listed explorers and developers with credible paths to resource growth have not yet caught up. The asymmetry has rotated down the curve, toward the names that can deliver ounces into a strong price.
Silver is finally moving with conviction after years of trading as a junior partner to gold. The industrial bid, solar, electronics, and increasingly defence, is structural rather than cyclical. ASX silver exposure is thin, which makes the names that do exist disproportionately leveraged to the move.
The broader critical minerals suite, rare earths, tungsten, antimony, tin, manganese, graphite, tantalum, and the platinum group, is where Western governments are now writing policy in real time. Offtake support, grants, equity stakes, and strategic stockpiling are no longer theoretical. For ASX developers in these commodities, the buyer is increasingly the state, or a strategic partner moving with state backing. That changes the financing calculus and shortens the path to production for the right projects
The implication for ASX small-cap resources companies
For ASX small-cap resources companies, the window to tell a credentialed story to a receptive investor base is open now. Generalist capital is starting to look at the sector again, but it has not arrived in force. The companies that will capture the most attention are the ones that have done the work on narrative, data, and sequencing before the rotation accelerates.
Investability’s methodology: Three messages, anchored to data, lead with the most credentialing information.
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A successful listing is not just about getting the prospectus lodged or the book built. It is about entering the market with a clear investment case, the right shareholder base, disciplined disclosure, and a first-year IR programme that keeps investors engaged beyond day one.
If you are preparing for an ASX IPO, dual listing, capital raise, or post-listing investor engagement programme, get in touch.
Sources
- Benchmark Mineral Intelligence. (2025). Lithium supply chain commentary and market intelligence. https://www.benchmarkminerals.com
- Core Lithium. (2025). Core Lithium sells stockpile to Glencore, eyes Finniss restart. com. https://www.mining.com/web/core-lithium-sells-stockpile-to-glencore-eyes-finniss-restart/
- IGO Limited. (2026). Quarterly activities report https://www.igo.com.au/site/investor-centre/asx-announcements
- London Metal Exchange. (2026). LME copper. https://www.lme.com/en/Metals/Non-ferrous/LME-Copper
- Liontown Resources. (2025). Quarterly activities report. https://ltresources.com.au/investors/asx-announcements/
- Mineral Resources. (2025). March 2025 quarterly report. https://www.mineralresources.com.au/investors/asx-announcements/
- S&P Dow Jones Indices. (2026). S&P GSCI Industrial Metals Index. https://www.spglobal.com/spdji/en/indices/commodities/sp-gsci-industrial-metals
Author: Dannika Warburton
Dannika is Founder and Principal of Investability, an Australian investor relations and media relations consultancy, with over 15 years capital markets experience across investment banking, institutional sales and IR.
