Copper Price Forecast 2024, 2025, 2030: Is Red Metal Set for New Record High?

Following an all-time high of $10,845 per ton in March 2022, the copper price steadily declined over the past two years due to China’s weakening economy brought on by new restrictions imposed in April 2022 in response to a fresh COVID-19 outbreak.

The aggressive monetary tightening in the United States, combined with the looming recession caused by surging inflation, exacerbated the weakness in the price of copper, which is frequently viewed as a barometer of economic health.

However, in the past weeks, the red metal – used in home appliances, electronic products, transportation equipment, and building construction – has rallied. It even tested an 11-month high on March 18, with the benchmark three-month copper contract at the London Metal Exchange briefly hitting $9,164.50 per ton.

Can the copper price maintain its momentum and test new highs? Let’s explore our latest copper price forecast for 2024, 2025, and beyond up to 2030.

Table of Contents Table of Contents

1. Key Takeaways
2. Copper Price Predictions Summary
3. Copper Price Analysis in 2023
4. Factors Affecting Copper Prices in 2024
5. Copper Price Forecast 2024
6. Copper Price Forecast 2025
7. Copper Price Forecast for 2030
8. The Bottom Line
9. FAQs
10. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. Copper Price Predictions Summary
3. Copper Price Analysis in 2023
Show Full Guide
4. Factors Affecting Copper Prices in 2024
5. Copper Price Forecast 2024
6. Copper Price Forecast 2025
7. Copper Price Forecast for 2030
8. The Bottom Line
9. FAQs
10. References

Copper Price Predictions Summary

Copper Price Analysis in 2023

Over 2022, copper dropped by 13.87% as China’s restrictive zero-COVID policy slowed the country’s industrial activity, reducing demand for industrial metals, including copper.

The lifting of COVID-19 restrictions in China, the world’s biggest copper buyer, in late 2022 helped copper prices get off to a strong start in 2023 at over $8,300/ton at the London Metal Exchange.

The price event briefly hit $9,430 per tonne in mid-January 2023, the highest price for the year and the highest since June 2022, due to optimism on China’s economy following the reopening of the country’s borders in early January.

However, as the year progressed, China’s recovery remained challenging due to a prolonged property crisis, weak local demand, and high levels of local government debt. In 2023, China’s economy grew by 5.2%, more than the government’s target of 5%. However, according to data provider Trading Economics, excluding the pandemic years, China’s 2023 economic growth was the slowest pace of annual rise since the 1990s.

The slump in China’s property market has sparked concerns across the industrial metals complex, primarily due to the sector’s significant consumption.

According to S&P Global, the property sector accounted for 30.8% of China’s steel consumption in 2023, 30% of the country’s aluminum consumption and 20% of copper consumption.

Ewa Manthey, Commodity Strategist at Dutch Bank ING, wrote in a note on March 18:

 “China is also the world’s biggest consumer of copper and a slump in China’s property market has been a major headwind to copper demand for the past year. A continued slowdown in the sector remains the main downside risk for the metal.”

On top of China’s lackluster recovery, central banks, particularly the US Federal Reserve, still maintained its hawkish rate hike, adding pressure to copper price.

Supply concerns, as several key producers struggled to raise output, kept copper prices supported in 2023.

S&P Global reported that copper output from Chile, the world’s largest producer of the metal, reduced by 2.3% in 2023 to 5.33 million tonnes, the lowest since 2008, due to tougher mining conditions, less rich ore grades, water constraints, and delays to major investment projects.

In October 2023, industry group the International Copper Study Group forecast a deficit of 27,000 tons in 2023.

Over 2023, copper price at the LME gained 2.2% year-over-year (y/y) and 2% at the US COMEX.

Factors Affecting Copper Prices in 2024

At the time of writing on 19 March, LME copper price was trading around $9,100/ton, about 16% from the record high reached in March 2022, and has gained 7.19% year-to-date (YTD).

The following factors may shape copper price predictions for 2024 and beyond.

China Economy

Uncertainties in China’s economic recovery, especially with the deepening crisis in the property sector, could remain a headwind for copper prices this year. In late January, a Hong Kong court ordered the liquidation of Chinese property giant China Evergrande Group.

At the National People’s Congress meeting on 5 March, Premier Li Qiang announced a growth target of 5% for 2024, unchanged from 2023, as the world’s second-largest economy wants to focus on “high-quality development.”

Prior to the critical conference, many expected the Chinese government to provide additional stimulus to support the country’s struggling real estate sector. However, that anticipation fell apart when there was no mention of a new stimulus for the real estate sector. In 2024, China will instead “modernize the industrial system and develop new quality productive forces” to fuel its economy.

According to the government work report delivered by Premier Li in the session, the government will “address both the symptoms and root causes to defuse risks in real estate, local government debt, and small and medium-sized financial institutions to safeguard overall economic and financial stability.”

Daniel Hynes and Soni Kumari, analysts at ANZ Research, said in a note on March 18:

“There was a lack of new supportive measures for China’s property market following the National People’s Congress meeting. Property prices have plunged as sales continue to contract. Investment in real estate not showing any signs of revival.”

In its January outlook, the International Monetary Fund (IMF) projected China’s economic growth to slow to 4.6% in 2024 and 4.1% in 2025.

Potential Supply Deficit

Copper supply may face challenges in meeting demand this year as some mines struggle to recover production amid various obstacles. This includes the prolonged halt of operations at the Cobre mine in Panama, which is operated by Toronto-based miner First Quantum Minerals.

ING’s Manthey wrote:

“A copper concentrates market deficit is expected this year after supply setbacks at global mines. Most recently in Panama, Canada’s First Quantum mine has ignited massive protests in the country and has been forced to shut down activity. Meanwhile, copper mines currently in operation are nearing their peak due to declining ore grades and reserves exhaustion.”

First Quantum Minerals, on November 28, 2023, announced it shut down its Cobre Panama mine, one of the world’s largest open pit mines, after Panama’s Supreme Court declared a law that approved the mine’s contract as unconstitutional. The decision came following a blockade by locals at a port and road to the mine.

According to Manthey’s note, Cobre Panama accounts for 1.5% of global copper output. Last year, it supplied 2.5% of China’s copper concentrate imports.

On the other hand, other key producers are seeing the production at their aging assets reach its peak, such as Escondida, the world’s largest copper mine, in Chile, said Manthey. In 2025, Escondida’s copper output is expected to be at least 5% lower than it is today, she wrote.

Chile’s state-owned miner Codelco – the world’s biggest supplier of copper – is struggling to return production to pre-pandemic levels of about 1.7 million tonnes a year by the end of the decade from around 1.3 million tonnes this year, according to Manthey.

She said:

“At the same time, there is a lack of high-quality, large-scale projects in the pipeline that could push the copper market into deficit as demand from the green energy sector grows.”

Separately, ANZ Research, in a note on February 1, estimated that growth in copper mine supply may fall to 4% for 2024 after the Cobre mine shutdown.

On the demand side, the company said that the demand for copper from builders of green energy infrastructure is expected to grow by 4% year-on-year to 27 mt in 2024.

Hynes and Kumari wrote:

“After a poor performance in 2023, mine supply challenges will likely continue, as political unease in Chile is raising the risk of disruptions. So copper’s market balance looks tight and could easily flip into deficit.”

The tight supply is evident in the declining LME inventories. As of March 14, copper inventories at LME stood at 107,300 tonnes, down from 165,700 in early January, according to LME data.

Daria Efanova, Head of Research at London-based Sucden Financial, wrote in the Quarterly Metal Report for Q1 2024:

“While talks about diminishing supply from key mining regions are not driving prices on the day, they are guiding the longer-term narrative. For 2024, we expect a finely balanced market with a growing deficit from 2025 onward. While expectations of global tightness were expected next year, there are already signs that supply might not be able to keep pace with demand this year.”

China Copper Capacity

Chinese top copper smelters agreed to start production cuts at some loss-making plants to cope with a shortage of raw material, Reuters reported on 13 March. The specific rates or volumes for the cuts have not been set.

The move came after spot treatment and refining charges (TCs/RCs) fell to record lows recently as Chinese producers scrambled for copper concentrates amid disruptions at mines and the expansion of global copper smelting capacity.

TCs/RCs are fees paid by mining companies to smelters to have their semi-processed ore or concentrate processed into refined or finished metal. A shortage of raw material supply typically leads to a drop in TCs and RCs.

China has been expanding its copper smelting capacity to anticipate demand from the green energy sector, such as electric vehicles (EVs), wind and solar power.

ANZ Research, in a note on March 5, stated that the expansion of smelting capacity supported China’s refined copper production to hit above 1 million tonnes in 2023.

Chinese smelters compete not just for raw materials with one another but also with new copper smelters that have sprouted in other parts of the world.

New projects, including Freeport McMoran’s new Manyan copper smelter in Gresik, Indonesia’s East Java Province, will have the capacity to process around 1.7 million tpy of copper concentrate, Fastmarkets reported.

According to Fastmarkets, major additional smelting capacity is scheduled for this year in India, the Democratic Republic of Congo (DRC) and Indonesia.

Sucden Financial’s Effanova expects the refined copper metal market to be in surplus next year as Chinese output continues to expand due to increased smelting and refining capacity.

Fed’s Rate Cuts

Energy and commodities markets are watching closely when the US Federal Reserve will begin loosening its monetary tightening cycle.

After the hope for an early rate cut to start in March diminished, traders have priced in the possibility of the first cut in the second half of this year.

Increased rates, which resulted in a stronger US dollar, have weighed on industrial metals over the last two years. A stronger US dollar increases commodity prices for buyers using local currencies.

ING’s Manthey said:

“Looking ahead, copper prices will be supported by a weaker US dollar on the back of Fed easing. We believe the Fed’s interest rate path will continue to drive copper’s short-term price outlook. Copper will benefit from looser monetary policy, which will alleviate the financial strain on manufacturers and construction companies by reducing borrowing costs.”

However, if the Fed decides to keep interest rates higher for longer, she anticipates a stronger US dollar and weaker investor sentiment, which might lead to lower copper prices.

Copper Price Forecast 2024

In general, analysts projected the copper price to trade higher this year, supported by a potential supply deficit, the US rate-cutting cycle, and improving demand.

Ole Hansen, the Head of Commodity Strategy at Danish lender Saxo Bank, said in a note on March 15 that the anticipated US rate-cutting cycle this year may prompt companies to restock after they depleted inventories last year to mitigate funding costs.

“We maintain our long-standing bullish stance on copper, and with copper miners also exhibiting signs of resurgence, the possibility of a fresh record high in the second half of the year appears achievable.”

In its latest copper price forecast on February 20, BMI, a Fitch Solutions company, projected copper to average $8,800 per ton in 2024, a 3.2% increase from the estimated $8,523 in 2023 as falling LME inventories has the potential to send prices higher.

ANZ Research’s copper price forecast 2024 expected the metal to trade at $8,950/ton, up from $8,496 in 2023.

As of March 18, Dutch bank ING projected that copper would trade at around $8,738/ton without giving a comparison with 2023.

Manthey wrote:

“We see copper prices rising in the second quarter, which is seasonally the strongest quarter for copper demand, to $8,700/t from $8,400/t in the first quarter. We see prices peaking in the fourth quarter at $9,000/t. They will, however, remain volatile as the market continues to respond to macro drivers, including the path of US interest rates and Chinese policies.”

Data provider Trading Economics predicted copper to trade around $3.75 per pound in the first quarter of 2024 and $3.57 in the next 12 months.

TD Securities projected copper to trade at $3.65/pound by the end of 2024, slightly down from $3.67/pound in Q1 2024.

Copper Price Forecast 2025

Most analysts have upbeat copper price predictions, expecting the metal to continue its uptrend in 2025.

In its copper price forecast 2025, BMI projected copper to average $9,300/tonne, up from $8,800 in 2024.

ANZ Research also saw copper could trade higher at $9,290/tonne in 2025, up from $8,950 in 2024.

For next year, ING expected the green metal to trade at around $9,050/tonne, up from the estimated $8,738/tonne in 2024.

TD Securities also predicted copper to reach $3.95/pound in Q4 2025, up from $3.85/pound in Q1 2025.

Copper Price Forecast for 2030

The exact long-term copper price forecasts are unavailable due to a multitude of elements involved and the high level of uncertainty.

Analysts, however, were certain that copper prices would remain high owing to rising energy transition demand. According to Saxo Bank’s Hansen:

“The ongoing green transformation is augmenting demand from traditional sectors like housing and construction.”

Copper is a critical component for EVs, wind, and solar power. For EVs, copper is used not only for cable and wire but also for inverters, charging stations, batteries, and electric motors. Wind turbines also use copper extensively, from generator coils and transformers to electrical cables.

Ewa Manthey of ING said:

“Copper has no substitute for its use in EVs, wind and solar energy, and its appeal to investors as a key green metal will support higher prices over the next few years.”

The Bottom Line

A supply shortfall and the Fed’s loosening monetary policy were expected to become tailwinds for copper prices this year.

However, uncertainties about China’s demand and the risk of the Fed keeping high rates beyond the second half of this year may cap any price gain.

FAQs