Copper Could Skyrocket over 75% to Record Highs by 2025 — Brace for Deficits, Analysts Say
- Copper is headed for a price spurt over the next two years, as mining supply disruptions coincide with higher demand for the metal.
- Rising demand driven by the green energy transition and a decline in the U.S. dollar strength come the second half of 2024 will fuel support for copper prices.
- Copper prices on the London Metal Exchange last saw an all-time record high of $10,730 per ton in March last year.
Other analysts see a bullish run for copper due to mining disruptions, with Goldman Sachs expecting a deficit of over half a million tons in 2024.
Last November, First Quantum Minerals halted production at the Cobre Panamá, one of the world’s largest copper mines, following a Supreme Court ruling and nationwide protests over environmental concerns. Anglo American, a major producer, said it would cut copper output in 2024 and 2025 as it seeks to cut costs.
“The supply cuts reinforce our view that the copper market is entering a period of much clearer tightening,” wrote Goldman’s analysts, who see copper prices hitting $10,000 per ton within the year, and much higher in 2025.
The winners of the copper rush will be mainly Chile and Peru, BMI estimates. Both countries have large reserves of green transition minerals such as lithium and copper that are poised to benefit from increased investment and higher export demand. Chile holds around 21% of global copper reserves.
“Our confidence that copper substantially re-rates into 2025 [of $15,000 per ton average] is now substantially higher,” Goldman said.
Lower supply also means that new copper smelters coming online will have a shortage of concentrates to work with, said S&P Global’s Senior Copper Analyst Wang Ruilin.
Copper ores are extracted from the earth and then converted into copper concentrates. From there they are sent to smelters to be purified into refined copper, which sets the benchmark LME price.
“Copper smelters will see a supply shortage of concentrate starting in 2024, and the forecast deficits in the concentrate market is expected to deepen in 2025–27,” she told CNBC via email.