Global Copper Market Rallies on Trade Optimism and Dollar Weakness

Copper prices have climbed to a three-week high this morning, with futures rising to approximately $4.90 per pound. The London Metal Exchange (LME) three-month copper contract gained 0.8% to $9,443.50 a ton as of 9:18 a.m. in Singapore.

Yesterday’s trading session showed significant momentum with Comex copper settling 3.17% higher at $4.8705, marking its largest one-day percentage gain since April 11.

The metal has gained in eight of the past nine sessions, positioning it just 6.62% below the all-time high of $5.216 reached on March 26. Easing US-China trade tensions stand as the primary catalyst behind copper’s recent surge.

President Donald Trump stated that final tariffs on Chinese imports “won’t be anywhere near as high as 145%,” though clarifying they “won’t be 0%” either. Treasury Secretary Scott Bessent described the current tariff standoff as “unsustainable.”

A weakening US dollar has provided substantial support for copper and other base metals. A Bloomberg gauge of the dollar fell to a 15-month low on Monday, making commodities cheaper for buyers using other currencies.

Supply constraints continue to influence the market with limited mining capacity creating pressure on refined copper production. Record-low treatment and refining charges signal limited availability of copper concentrates.

Copper Market 2025

The International Copper Study Group reports that global mine production increased by about 2% in January 2025. World refined copper usage grew by approximately 1% in January 2025, creating a preliminary deficit of about 19,000 tons.

This tight supply-demand dynamic extends even as the market expects a narrower surplus for 2025 compared to 2024. Chinese economic activities remain crucial for copper demand, with strategic stockpiling and infrastructure development supporting consumption.

Technological growth factors including renewable energy, electric vehicles, and data centers drive long-term demand expectations. Production challenges persist across major copper regions.

Chile’s mines have disappointed in recent years, with 2034 production forecasts downgraded by 900,000 tonnes. Peru increased production by 7% year-over-year due to the ramp-up of Quellaveco mine.

Analysts project continued price strength through 2025. Trading Economics forecasts copper to trade at $5.05 per pound within 12 months. Cochilco expects copper to remain above $4/lb for the next decade, reflecting structural demand growth from energy transition projects.

In short, the industry faces a significant investment challenge with approximately $2.1 trillion needed over the next 25 years to meet projected demand growth.

Current high prices improve project economics but declining ore grades and environmental requirements constrain supply expansion.

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