Copper Market Faces Uncertainty in 2025 Amid Mixed Forecasts
The global copper market is poised for a volatile year in 2025, with a mix of positive and negative factors shaping price, demand, and supply dynamics. Despite the bullish momentum seen in 2024, driven by the emerging artificial intelligence (AI) sector and increased demand for data centers, several uncertainties are clouding the outlook.
At the start of 2024, there was optimism about copper prices reaching $40,000 per ton within four years. However, this forecast missed expectations as uncertainties, including political developments and economic conditions, hampered sustained price rallies. The surge in copper prices during the second quarter of 2024 was offset by a strong US dollar and cost pressures stemming from the US election in the fourth quarter. By year-end, copper prices trended downward, erasing much of the earlier gains.
The supply outlook for 2025 presents a mixed picture. In November, concerns about global supply intensified when the Cobre Panama mine ceased operations. However, these fears were partially alleviated by increased production at other mines, including Escondida in Chile, which is projected to boost output by 22% this year. Overall, global copper production in Chile is expected to rise by more than 6%.
New mining projects, such as Amalric in Uzbekistan, Kamoa-Kakula in the Republic of Congo, and QB2 in Chile, are anticipated to contribute to global supply in 2025. These developments could offset the impact of aging mining facilities in key producing countries, which some analysts believe could constrain output.
On the demand side, the transition to renewable energy, the growth of AI-related data centers, and China’s economic policies will continue to play significant roles. China, which accounts for 56% of global copper consumption, is expected to increase its usage by 2.2% in 2025, reaching approximately 15 million tons annually. Globally, copper consumption is projected to grow by 3.9%, with most of the demand increase coming from outside China.
Price forecasts for 2025 remain divided. Goldman Sachs predicts an average price of $10,160 per ton, while Morgan Stanley estimates prices could reach $9,500 by the year’s end. The Chile Mining Association forecasts a range of $9,260 to $9,920 per ton, reflecting optimism for price rallies extending into 2025. However, Citi Group has revised its forecast downward to $8,750 per ton, and RBC Capital Markets and BMO project a price of $8,800 per ton. Capital Economics offers a more pessimistic outlook, predicting prices could dip below $9,000 in 2025 and trend toward $8,000 by 2026, potentially persisting through 2030.
The copper market’s trajectory in 2025 will hinge on the balance between supply disruptions, demand growth, and macroeconomic factors such as currency strength and global economic stability.
