Research Firms And Industry Insiders Clash On Copper, Agree On Trump's Risk

BMI Research revised its 2025 copper price forecast to $10,000 per ton, reflecting uncertainties tied to U.S. trade policies and global economic headwinds.

What Happened: BMI expects President-elect Donald Trump's return to the White House to decelerate the green-energy transition and drive a stronger dollar via tariffs.

A deceleration in the energy transition potentially looming over Trump-led policy shifts might dampen the ‘green sentiment’ that bolstered prices in 2024," BMI's quarterly report said.

The firm also highlighted China's ongoing economic challenges, particularly in the property sector, as a drag on copper prices. Mainland China accounts for about half of global copper consumption, and its stimulus measures in late 2024 did little to offset the sector's slowdown.

Meanwhile, S&P Global's analysts anticipate that any major turnaround will require significantly more policy intervention.

"A strong dollar adds downside risk to prices in 2025, with most economists downgrading growth forecasts due to expected U.S. tariff hikes," said principal analyst Ronnie Cecil. The anticipated tariffs, ranging from 10% to 100% on key imports, are expected to disrupt global trade flows and exacerbate economic pressures, particularly for export-driven economies like China.

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Why It Matters: Trade policies are dominating commodity outlooks as market fundamentals take a backseat.

Paradigm Capital mining analyst David Davidson cautioned, "If we get a tit-for-tat trade war, then kiss global economic growth expectations goodbye." S&P Global projects a modest surplus in refined copper for 2025, while deficits in copper concentrate markets persist due to insufficient mined supply.

Copper prices on the London Metal Exchange averaged $9,307 per ton in 2024 and Commodity Insights forecasts a rise to $9,825 per ton in 2025. However, the concentrate market faces significant challenges, including the prolonged shutdown of First Quantum's Cobre Panama mine, which the local government shut down in December 2023.

Without a mine that provided around 1.5% of the global supply, the estimated 52,500 metric ton deficit from 2024 could balloon to over 840,000 in 2025. Davidson noted that Cobre Panama might not resume operations until 2026.

Despite uncertainties, some industry leaders remain cautiously optimistic. Rio Tinto CEO Jakob Stausholm pointed out that previous U.S. trade policies had bolstered their operations and expressed confidence in navigating potential challenges. "We are a global business; we can cope with this," he remarked.

Other industry insiders share a similar sentiment. White & Case's straw poll of 112 decision makers from the metals & mining sector noted copper as the number one pick to outperform in 2025. Still, insiders align with market research firms, ranking geopolitical risks at the top of the industry's short-term hurdles.

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