Due to concerns over Chinese demand and the strengthening of the US dollar, copper prices have fallen by about one-fifth since reaching a record high in May. The situation has been further impacted by President-elect Donald Trump’s threat to impose a 60% tariff on goods imported from China, along with smaller tariffs on products from other regions, which continues to darken the outlook for copper prices.
On Monday (local time, December 9), copper prices rose, increasing by over 2% overnight to a four-week high of $4.30 per pound ($9,470 per ton) on the Chicago Mercantile Exchange. This came after China signaled a departure from its “prudent” monetary policy stance for the first time since 2008. However, in afternoon trading, March copper shed some of its gains by the end of regular trading hours.
In a new report, London-based research firm Capital Economics warned that “the scale of China’s monetary easing is far less than it once was, and even at lower interest rates, households and most of the private sector now show limited interest in taking on more debt. Our calculations indicate that the share of budget spending allocated for investment this year is expected to reach the highest level since 1987.
The significant growth of fixed investments in China is a positive development for the metals market, particularly for copper, which is widely used in industries, manufacturing, and construction. However, Capital Economics noted in a research report from September that they expect copper and aluminum prices to decline over the next few years, falling below widely held expectations in the 2020s. They predict that next year, copper prices will drop below $9,000 per ton, with an average price of only $8,000 by the end of 2026, continuing to decrease until 2030.
Moreover, Citigroup has stated that due to the additional US trade tariffs imposed by the Trump administration and economic risks in China dragging down consumption and prices for next year, copper prices seem likely to face challenges.
In a report led by analyst Max Layton, copper is widely viewed as a barometer of the global economy. They forecast an average price of $8,750 per ton in 2025, lower than the previously predicted $10,250 per ton. The tightening monetary environment in developed economies, combined with a reduction in policy support for electric vehicles, is expected to delay the recovery of global manufacturing activity until after 2025.
Citigroup analysts also indicated that as global manufacturing activity eventually responds to monetary easing, copper prices could rise to $10,000 by 2026.
The bank has also downgraded its forecasts for other metals, with aluminum’s forecast for 2025 cut by approximately 4% to $2,640 per ton, and zinc’s forecast lowered by about 5% to $2,800 per ton.
