The quote of copper It is on track to close 2025 with a new record and an annual profit not seen since 2009, amid the debate about whether its rise beyond its importance for the energy transition is justified.
At the close of December 24, the last day of the week in which the London Metal Exchange operated before the Christmas holiday, the price of the red metal closed at US$5.56 per pound. If this level is maintained in the days remaining until the end of the year, it would reach an annual gain of 40.7%, only surpassed by that of 2009 when it reached 153%.
In addition, on the Shanghai Futures Exchange, copper traded for the first time near 100,000 yuan or US$14,270 per ton, well above what it is quoted in US markets. For example, copper for March delivery, the most active futures contract in New York, hit an intraday high of $5.9 per pound, just over $13,000 per ton.
Thus, 2025 in many ways has been an exceptional year for the red metal marked by difficulties in emblematic mines and large producers that did not reach their production goals, as well as speculation of possible import tariffs.
Drivers of the rise
One of the main drivers of the copper rally has been fear that the United States will impose tariffs on copper. That possibility sparked a race to import metal into the country, forcing manufacturers in other regions to compete intensely for supplies. As carriers advance shipments to the U.S., prices in other markets have continued to rise.
In addition, supply pressures intensified following a series of disruptions at large mines around the world. In the Democratic Republic of the Congo, the Kamoa-Kakula complex suffered flooding in one of its underground mines following seismic activity in May.
In Chile, a rock explosion at Codelco’s El Teniente mine on July 31 left six dead and paralyzed operations for more than a week. More recently, a fatal slide forced the shutdown of Freeport-McMoRan’s Grasberg mine in Indonesia.
As a result, several miners cut their production projections. Deutsche Bank warned that production from the world’s largest suppliers will fall 3% this year and could decline again in 2026.
Additionally, prices of the red metal have been supported by the current weakness of the US dollar, which makes raw materials cheaper for international buyers.
Morgan Stanley analysts expect the global copper market to face the most severe deficit in more than 20 years next year, with a gap of around 600,000 tonnes. Citigroup noted that prices could reach US$15,000 per ton in a bullish scenario.
Not everyone is convinced
In a recent note, Canadian capital investment bank BMO Capital Markets noted that, despite the strong increases already recorded, copper still offers additional potential to rise, given that the buildup of inventories in the United States continues to dominate price formation.
However, not everyone is convinced that the rally is sustainable. Goldman Sachs warned that the recent increases respond more to expectations of future shortages than to current supply and demand conditions.
And due to the threat of tariffs that could make the red metal that arrives in the United States more expensive, operators have stored between 730,000 and 830,000 tons in warehouses within that country to cover themselves. Therefore, if the tariffs are lighter than expected, the accumulated copper could be released and cause a price collapse.
Even so, the bank maintains a favorable view on copper and raised its projection for next year to US$11,400 per ton.
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