BofA: Energy Transition and Limited Supply to Drive Copper Prices Higher by 2025

According to analysts at BofA Securities, copper prices are benefiting from strong demand, constrained supply, and increased investment in clean energy transition projects. Despite global macroeconomic concerns, copper has shown surprising resilience, with a 6% rise year-to-date in 2024.

Key drivers of this growth include inadequate mine supply, declining ore output, and processing challenges, which have collectively limited copper production. Additionally, copper processing and refining tariffs have fallen sharply, underscoring the difficulties smelters are facing.

Demand for copper has been bolstered by significant spending on energy infrastructure, particularly grid expansion projects driven by decarbonization efforts. In China, investment in these areas has helped offset reduced demand in sectors like residential construction.

BofA analysts forecast that copper prices will continue to climb, potentially reaching US$10,750 per tonne by 2025 as these factors persist.