Global Copper Market and Prices Forecast: What to Expect in 2025

Copper, often referred to as “red gold,” is a fundamental material in various industries, from construction to electronics. Its versatility, conductivity, and durability make it indispensable. However, like any commodity, the price of copper fluctuates based on market trends, global demand, and supply chain dynamics. In this blog, we will delve into the current copper market trends, analyze global copper price trends, and explore the price advantages in copper export.

The  Global Copper Market: An Overview

As we progress through 2024, the global copper market reveals a multifaceted landscape shaped by diverse economic conditions across key regions like the US, China, and Europe.

In the United States, copper prices remain stable but subdued, primarily due to the seasonal summer slowdown, with premiums holding steady in the Midwest. Despite current challenges, long-term optimism persists, driven by potential supply imbalances and rising demand for copper in green energy initiatives.

China, a significant player in the copper market, experienced a modest recovery in its physical market in August 2024. The copper grade A cathode premium in Shanghai increased, indicating improved market conditions. This recovery is fueled by expectations of better import arbitrage opportunities following a decline in LME prices, although price volatility continues to pose challenges.

In Europe, the copper market remains weak, especially in Germany, the continent’s largest consumer. Despite some demand from green energy projects, overall market conditions are bearish, with high stock levels and sluggish performance in the manufacturing, automotive, and construction sectors.

China Improved Macroeconomic Conditions

China’s stimulus package, announced in September, represents a significant injection of liquidity totaling 3.95 trillion yuan ($560 billion), equivalent to over 3% of China’s GDP. The size of this package is substantial, nearing the level of support provided during the Covid-19 crisis. Alongside the Federal Reserve’s recent rate cuts, this should increase liquidity in the financial system in the coming months. Speculators have already begun to re-engage on the long side of the copper market in response. Given that the fourth quarter is historically the strongest for copper, we expect prices to average around $10,265 per tonne in Q4 2024, which would mark a record high.

Short-term Challenges of Copper Market

Lower trading volumes and potential market volatility suggest caution. Despite the expected rise, the market remains sensitive to macroeconomic conditions and geopolitical events. Investors should keep an eye on these factors as they could impact short-term price movements.

The global copper price chart below shows the relationship between global refined copper supply and demand, from 2022 through 2025.

Long-Term Copper Price Outlook for 2025 and Beyond

Looking beyond the near term, the copper market and its prices are set for a bullish long-term trend, fueled by the growing demand from the energy transition. For example, by 2025, the copper grade A cathode premium in Rotterdam is expected to increase by about 25%, indicating tighter regional supply and a recovering European market.

Fastmarkets’ long-term outlook for copper remains positive. As we approach 2034, refined copper consumption is projected to be significantly driven by sectors associated with the energy transition, such as electric vehicles and renewable energy applications. The expected structural supply deficit will likely require increased investments in production facilities, further supporting a bullish outlook for copper prices.

Key Drivers of Copper Demand and Projected Growth Rates

As previously mentioned, refined copper consumption will be bolstered by demand from sectors associated with the energy transition. Some of its applications include:

• Connecting batteries to electric vehicle (EV) powertrains

• Use in electric motors within EV charging infrastructure

• Solar and wind energy applications

• Grid connections

We anticipate total apparent demand for copper to increase at a compound annual growth rate (CAGR) of 2.6% over the decade leading up to 2034. Copper consumption in energy transition sectors is expected to grow at a CAGR of 10.7%, with the EV sector growing at 14.3%, the solar power industry at 5.6%, and wind power applications at 9.3%. Traditional, non-energy transition sectors are projected to experience a growth rate of 1.4%.

Regional Copper Price Forecasts for 2025

The US copper market is anticipated to experience a moderate rise in demand, fueled by government infrastructure initiatives and an increasing focus on renewable energy. This tightening supply-demand balance is expected to support higher copper prices.

China continues to be a pivotal player in the global copper market. The country’s emphasis on green energy and electric vehicles will drive substantial demand. We forecast that the Shanghai premium will average around $27 per tonne in 2025, representing a 25% decrease from the estimated 2024 average. Despite this short-term decline, the long-term outlook remains positive, with expectations of stabilization and growth.