Copper Prices in 2025: Bullish or Bearish?

Copper prices have fluctuated wildly in 2024, driven by speculation, AI hype, and shifting economic conditions. The AI boom created a rise in copper demand expectations as data centers, which require vast amounts of power and copper-intensive infrastructure, became a key focus for investors looking for the next big growth driver.

In 2025, traders need to sift through market noise and focus on supply-demand fundamentals, geopolitical risks, and macroeconomic trends.

Copper Price Rise and Fall in 2024

Copper price jumped to an all-time high of nearly $5.20 a pound or $11,500 per tonne in May 2024, driven by speculative bets on AI demand and military spending. But while AI and electrification remain long-term demand drivers, they have failed to make up for structural weaknesses, particularly in China’s construction sector. As speculative long positions are closed, Trump’s tariffs and a strong dollar put further pressure on prices, erasing much of the year’s gains.

2025 Supply Outlook

Despite supply chain disruptions in 2024, global copper production is expected to increase in 2025. Major supply-side developments:

• Codelco’s production recovery and a 22% YoY boost from Escondida will support Chilean output at 5.4–5.6 million tonnes.
• While major greenfield projects are scarce, expansions at Almalyk (Uzbekistan), Kamoa-Kakula (DRC), QB2 (Chile), and others will add new supply.
• The DRC continues to lead mine supply growth, with CMOC’s Tenke Fungurume and Kisanfu mines ramping up.
• If the Cobre Panama mine restarts, an additional 300 ktpa of mine supply could extend market surpluses into 2029.

Bottom line: Supply is increasing, making bullish bets riskier unless demand materially outpaces projections. Historically, similar supply expansions—such as the 2018 rise from Chilean and Peruvian mines—led to prolonged price stagnation despite bullish narratives.

Demand Drivers

China, consuming 56% of global copper, remains the biggest question mark. Let’s see key demand trends

• A potential 50% peak-to-trough correction in China’s real estate sector could significantly dent copper demand.
• China’s state grid investment exceeded $400 billion in 2024, but whether this continues in 2025 is uncertain.
• RBC expects global copper demand to rise by 2.9% in 2025, but China’s expansion is projected at just 1%.

Unless China's stimulus measures prove more effective than in 2024, demand may not be strong enough to offset the increase in supply.

Copper Price Forecasts

Investment banks are split on copper’s 2025 price trajectory:

• Bullish Cases: Goldman Sachs maintains a $10,160/t average target, while Morgan Stanley sees $9,500 by year-end.
• Neutral to Bearish Cases: RBC and BMO expect prices to hover around $8,800/t ($4.00/lb).
• Bearish Cases: Capital Economics foresees copper dropping below $9,000 in 2025 and averaging just $8,000 by 2026.

The wide price range shows uncertainty about the recovery in Chinese demand and supply chain developments.

Key Strategies for 2025

Given the current market setup and its alignment with past market cycles, traders should consider the following strategies:

• Fade the Hype: Copper has seen speculative surges before, and they tend to unravel quickly. If another AI-driven narrative emerges, be wary of overextended long positions.
• Watch Treatment Charges: Smelter treatment charges fell to an all-time low, signaling oversupply of concentrate rather than bullish demand. Keep an eye on whether refiners actually cut output in 2025.
• Monitor Chinese Stimulus: If Beijing unexpectedly ramps up fiscal or monetary support, it could trigger short-term price rallies.
• Supply Chain Risks: Potential supply disruptions (strikes, political instability) could create short-term squeezes, but these are unlikely to offset the overall surplus.
• Trump Trade Policies: A stronger dollar and potential tariffs could weigh on copper, making USD strength an important macro factor to track.

The Bottom Line Is

Copper bulls are betting on long-term trends like AI, electrification, and supply bottlenecks, but potential risks such as regulatory changes or technological shifts could challenge these narratives.

However, in the short term, excess supply, weak Chinese demand, and macroeconomic obstacles suggest a more cautious approach. With most forecasts now grouping around the $8,800/t level, traders should remain flexible and avoid chasing speculative narratives without solid fundamental backing.