Copper prices experienced a decline on Tuesday but are on track for a second consecutive yearly gain, with the outlook for 2025 heavily influenced by China’s economic recovery and the policies of U.S. President-elect Donald Trump.
Key Highlights:
Current Market Performance:
Three-month copper on the London Metal Exchange (LME) fell 1.5% to $8,781.5 per metric ton as of 1647 GMT, yet it has gained 2.6% overall this year.
Supply and Demand Dynamics:
Aneeka Gupta, director of macroeconomic research at WisdomTree, noted that “supply setbacks at global mines contributed to a tightening in the global copper market.”
The industrial recovery in key economies and demand from the green energy transition have also supported copper prices.
Historical Context:
Copper prices reached a historic high of $11,104.50 in May due to a fund-buying frenzy but have since fallen by 20%, impacted by a strong dollar, threats of import tariffs, and ongoing doubts about China’s economic recovery.
China’s Economic Situation:
As the largest consumer of commodities, China is grappling with weak consumption and a prolonged property crisis. However, recent fiscal and monetary measures are expected to help spark a recovery.
Political and Trade Uncertainties:
Trump has threatened tariffs exceeding 60% on Chinese goods, raising concerns about potential trade wars and their impact on industrial metals demand.
Tim Waterer, chief market analyst at KCM Trade, warned that “uncertainty around the scope and fallout of any possible trade wars under the incoming Trump administration could cast a cloud over industrial metals demand.”
Future Outlook:
If China’s economic malaise continues into 2025, it could pose a headwind for copper prices.
Performance of Other Metals:
Aluminium: LME aluminium edged up 0.1% to $2,553.50 a ton, gaining 7.1% for the year due to a shortage of raw materials.
Zinc: LME zinc dropped 1.3% to $2,979.50 but rose 12.2% for the year.
Tin: Tin prices fell 1.3% to $28,915, yet are set to register an annual gain of 13.8%.
Nickel: LME nickel decreased 0.5% to $15,340 and is poised for an annual loss of 7.6%.
Lead: Lead prices increased by 0.4% to $1,955, but are on track for a 5.5% annual loss.