A French hedge fund manager, reportedly infallible, predicts that copper will reach $40,000 per ton “in about four years.” This statement seems fitting as even those with decades of experience in the metal markets have become exuberant, labeling copper as the “new oil” and calling it “the most confident trade ever,” while forecasting a 50% price increase.
In 2024, copper trading surged, attracting speculators from outside the commodity circles eager to connect copper with the ultimate market driver—artificial intelligence. However, the copper market bubble quickly deflated. Fund managers aggressively pushed copper prices higher again at the end of September, this time based on economic stimulus plans from Beijing, but subsequent price increases fell far short of expectations. The year of copper’s brilliance was met with final blows from Trump’s tariffs and a strengthening dollar, and now it appears that much of the price gains for copper in 2024 will be forfeited as a new year begins.
But what will happen in 2025? The Bank of Montreal states that the copper market will remain well-supplied in 2025, with a growth rate of about 2.8%, which is above recent historical levels. Macquarie suggests that copper production could increase by 4% in 2024, indicating that future supplies may not be as tight as previously thought.
In terms of demand, the context of energy transition and the long-term outlook for copper remain optimistic. Overall, China accounts for approximately 56% of global copper consumption, which amounts to about 15 million tons. A recent research report by Capital Economics noted that the adjustment in China’s construction activity, which has “declined up to 50% from peak to trough,” will offset much of the electrification demand.
RBC Capital Markets forecasts that global copper demand will grow by 2.9% year-on-year in 2025, with most of the growth coming from regions outside of China.
Goldman Sachs expects the average copper price next year to be $10,160 per ton. Morgan Stanley predicts that by the end of 2025, copper prices will climb to $9,500. The Chilean Mining Association is also one of the more optimistic institutions, projecting copper prices to range between $9,260 and $9,920. However, Citigroup has recently lowered its copper price forecast from an average of $10,250 to $8,750 for next year.
