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Although most metal prices have steadily risen this year, their performance has fallen short of the bullish predictions that many had anticipated—especially for copper. Weak demand from China has been disappointing, and ongoing uncertainty surrounding the upcoming U.S. presidential election has further dampened market sentiment.
A day after the Federal Reserve announced a significant interest rate cut of 50 basis points to stimulate the U.S. economy and labor market, copper prices reached their highest level since mid-July. On Thursday morning (local time September 19), the price of copper for October delivery on the New York Commodity Exchange rose by 2% compared to Wednesday’s closing price, reaching $3.38 per pound ($9,636 per ton).
In a report, Everbright Futures stated that the 50 basis point rate cut announced by Federal Reserve Chair Jerome Powell “is conducive to expectations of a soft landing for the U.S. economy,” adding that the fundamentals for copper are gradually improving.
Earlier this week, Bank of America analysts predicted that copper prices would surpass $10,000 per ton by 2025. Strong demand, constrained supply, and increased investment in energy transition projects have kept copper prices robust. With the Fed’s rate cut, manufacturing activity is expected to stabilize, leading Bank of America to maintain a constructive outlook on copper prices for 2025.
Concerns about supply disruptions and expectations of increased green demand have driven copper prices into a bull market, with prices exceeding $11,000 per ton earlier this year. However, there are several potential risks for the copper market in the long term. Recent data from the International Energy Agency (IEA) indicates that global industrial activity is slowing, particularly in Western economies, which may further weaken demand in the coming months. Additionally, global copper mine supply is expected to gradually increase over the next year, potentially limiting the upward price movement for copper in the medium to long term.
Production in major copper-producing countries like Peru and Chile is rising, especially as some miners plan to increase output in the coming years. This suggests that supply will gradually ease. The IEA’s forecasts indicate that global copper supply will peak in 2025, at which point the market may face excess pressure.
In the short term, copper prices may continue to be supported by rising demand and tightening supply, but the medium to long-term outlook remains uncertain.
