Copper prices have surged in 2025, climbing more than 6% during the first six trading days of the year. On Thursday, copper futures on COMEX hit $4.29 (€4.17) per pound, marking their highest level since December 11. This rally reflects ongoing supply constraints and increasing demand, especially from China.
The global shift towards renewable energy, electric vehicles, and artificial intelligence has significantly boosted copper demand. However, underinvestment in copper mining may limit supply for years. S&P Global forecasts that global copper mine production will peak at 23.5 million tons by 2026, followed by an annual decline of 2.3% through 2035. In the short term, China’s stimulus efforts and refinery overcapacity are expected to drive copper prices higher.
China’s Stimulus Bolsters Demand Outlook
Copper experienced volatility in 2024, with prices reaching a record $5 (€4.9) per pound in May before dropping sharply by August. China, as the world’s largest copper consumer and supplier, played a key role in this price fluctuation.
In September, China announced sweeping stimulus measures, including lower lending rates, direct cash injections, and reduced down-payment thresholds for property purchases. These policies temporarily boosted copper prices but lacked sustained momentum due to insufficient follow-up measures. Prices fell to just under $4 (€3.9) per pound by the end of 2024, following a second peak of $4.8 (€4.7) per pound in September.
In 2025, analysts expect China to ramp up stimulus efforts, particularly in light of Trump’s presidency in the US. Recent initiatives include expanding consumer trade-in schemes for home appliances. Experts predict further rate cuts and reduced bank reserve requirements to support economic growth. However, sustained growth in copper demand depends on more direct fiscal support for construction and development.
Trump’s Tariffs May Limit Copper’s Gains
President-elect Trump’s proposed tariffs could challenge the upward trend in copper prices. His plans include a 60% tariff on Chinese exports and a 25% tariff on goods from Mexico and Canada.
A strong US economy and rising demand for electric vehicles and AI-related products are expected to support copper demand. However, increased Chinese imports could drive US inflation, potentially leading the Federal Reserve to tighten monetary policy. Higher interest rates or a stronger US dollar could dampen global industrial metal demand, including copper.
According to ING analysts, copper prices may stay elevated in the first quarter due to China’s refinery overcapacity. However, Trump’s tariffs are expected to cap prices during the second and third quarters. Further Chinese stimulus measures could offset some of the downward pressure later in the year.
