Rudolph Angler Copper prices have surged in early 2025, rising over 6% in just the first six trading days of the year. Copper futures at COMEX climbed for a fourth straight session, reaching $4.29 (€4.17) per pound on Thursday morning, the highest level since December 11. The rally reflects ongoing supply constraints and strong demand for the versatile metal.
Driving this surge is the global push toward renewable energy, electric vehicles, and artificial intelligence, all of which heavily rely on copper. However, limited investment in copper mining could cause supply shortages for years. According to S&P Global, global copper mine output will peak at 23.5 million tons by 2026, then decline annually by 2.3% until 2035. In the short term, China’s aggressive stimulus measures and its refinery overcapacity play a major role in supporting copper prices.
China’s Economic Policies Support Copper Demand
Copper experienced a turbulent 2024, with prices reaching a record high of over $5 (€4.9) per pound in May before dropping sharply. China, the largest producer and consumer of copper, played a key role in this volatility.
Last September, China introduced significant economic stimulus measures, including lower lending rates, debt-funded cash injections, and reduced down payment requirements for property purchases. These moves temporarily pushed copper prices higher. However, the lack of consistent policy implementation caused prices to slide by year-end to below $4 (€3.9) per pound.
China is expected to expand its stimulus measures further in 2025 to counter the effects of Trump’s presidency. Recent policies include an expanded consumer trade-in program aimed at boosting domestic demand by adding more home appliances to the eligible product list. Analysts anticipate additional interest rate cuts and lowered reserve requirements for banks, although sustained copper price increases depend on broader fiscal policies. “We need more direct fiscal support for construction to see prices rise sustainably,” said Kyle Rodda, a senior market analyst at Capital.com.
Trump’s Tariffs Threaten Copper Price Growth
Despite the positive outlook from China’s measures, Trump’s presidency introduces significant risks to the global copper market. The US President-elect has pledged a 60% tariff on goods from China and 25% tariffs on imports from Mexico and Canada.
These tariffs could increase inflation in the US, forcing the Federal Reserve to slow monetary easing or raise interest rates. Such actions could weaken global industrial activity and dampen demand for base metals like copper. Additionally, a stronger US dollar may further pressure copper prices.
An ING analysis forecasts that copper prices will remain elevated in the first quarter, driven by China’s refinery overcapacity. However, the upward trend may lose momentum from the second quarter onward due to Trump’s tariffs. Even so, further stimulus from China could offset potential price declines, stabilizing copper markets.