The global shift towards renewable energy, electric vehicles, and the booming artificial intelligence sector is collectively driving the demand outlook for copper. However, insufficient investment in copper mines could remain a problem in the coming years. A report by S&P Global indicates that global copper production will peak at 23.5 million tons between 2025 and 2026, and then decline at an annual rate of 2.3% until 2035.
In early 2025, copper prices started strong, rising more than 6% in the first six trading days of the year. As of Thursday (January 9) at 5:10 AM Central European Time, COMEX copper futures prices increased for the fourth consecutive day, reaching $4.29 per pound (€4.17), the highest level since December 11. This price increase indicates that the base metal copper continues to face persistent supply constraints and rising demand this year.
In the short term, China’s stimulus measures and excess smelting capacity may be the main drivers for copper prices. The year 2024 has been tumultuous for copper, with prices soaring in the first five months and reaching a historical peak of over $5 per pound (€4.9) in May, followed by a sharp decline until August, during which China played a key role in driving copper price fluctuations. China is the world’s largest producer and consumer of copper and a key player in the global transition to green energy.
China is expected to accelerate its stimulus measures in 2025, particularly during President Trump’s term. In recent developments, China has expanded its consumer trade-in program to boost demand and included more household appliances in the list of qualifying products. Analysts expect Beijing to further lower interest rates and reduce banks’ reserve requirements to support economic growth this year.
However, the demand outlook for copper remains uncertain before the implementation of further stimulus policies in China this year. Senior market analyst Kyle Rodda stated, “I believe that to see prices continue to rise, we need to see more direct fiscal support from China in terms of construction and development.”
ING analysts predict that due to excess smelting in China, copper prices may remain high in the first quarter. However, during the second to third quarters, Trump’s tariffs could limit the upward momentum of copper prices, while any downward trend may be alleviated by further stimulus measures from China.
