The price of copper in London rose on Monday, buoyed by a weaker dollar and improved manufacturing activity in China, a major consumer of metals. In a report released last Friday, J.P. Morgan predicted that the global refined copper deficit would increase to 160,000 metric tons by 2026, and continued to forecast an average copper price of around $11,000 per ton for the next year.
Following U.S. President Donald Trump’s decision to initiate a national security investigation into copper imports to consider potential new tariffs, J.P. Morgan stated that it expects at least a 10% tariff on imports of refined copper and copper products to be implemented by the end of the third quarter of 2025, with a significant risk of the tariff increasing further to 25%. In the months leading up to the implementation of copper tariffs, the U.S. may accumulate excessive inventories, which could lead to a shortage of copper supply in the rest of the world, laying the groundwork for our bullish forecast of copper prices reaching $10,400 per ton in the second half of 2025.
The bank also predicts that China’s copper demand growth will slow from 4% last year to 2.5% this year. However, global copper demand growth is expected to only slightly decelerate from 3.2% in 2024 to 2.9% in 2025.
According to a report by the International Copper Study Group (ICSG), the global refined copper market experienced a deficit of 22,000 metric tons in December, compared to a deficit of 124,000 metric tons in November.
Meanwhile, Citigroup stated in a report last week that it expects copper tariffs as high as 25% to be ultimately implemented by the fourth quarter of 2025 following Trump’s executive order.
Goldman Sachs Group believes that the current economic environment is more favorable for commodities than the decade following the financial crisis. The reduction in economic slack, supportive fiscal policies, supply chain restructuring, and rising inflation expectations provide a more favorable backdrop for the commodities market. Based on the fundamentals of commodities, Goldman Sachs particularly recommends going long on commodities such as gold, copper, aluminum, and oil, considering these products to have significant investment value in the current market environment. As the global economy shifts from deleveraging to fiscal stimulus and supply chain reshaping, the commodities market may usher in new growth opportunities.
