MR. COPPER GOES FUN. WITH DONALD TRUMP — IT IS A BULL RUNCopper prices in 2025 are up about 27 percent year-to-date, driven by a complex interplay of technical and fundamental factors, with geopolitical events such as the Trump administration's tariff policies and the escalation of geopolitical tensions in the Middle East having a significant impact.
Fundamental Outlook:
The main driver of copper prices in 2025 is the ongoing global surge in demand driven by the transition to clean energy. Copper is essential for electric vehicles (EVs), renewable energy infrastructure, and grid upgrades, all of which require extensive use of copper due to its superior electrical conductivity.
For example, EVs use about 2-4 times more copper than traditional vehicles, and renewable installations such as wind turbines contain several tons of copper each. This structural growth in demand underpins the optimistic outlook for copper in the medium to long term.
On the supply side, however, copper production is growing. The International Copper Study Group (ICSG) forecasts a global copper surplus of 289,000 tonnes in 2025, more than double the 2024 surplus. This surplus is driven by rising production, particularly from new or expanded operations in the Democratic Republic of Congo, Mongolia, Russia and elsewhere.
Capacity increases in these regions, coupled with smelter growth, could contribute to a supply glut despite strong demand.
Conversely, geopolitical tensions in the Middle East could disrupt bauxite and alumina supply chains, a region that is a strategically important supplier of raw materials.
Impact of Trump Tariffs:
The Trump administration’s threats and actions to impose tariffs on U.S. copper imports have added volatility and complexity to the market. The tariff announcement triggered a sharp sell-off in early April 2025 as concerns about the impact on US manufactured demand and global trade flows grew. London Metal Exchange (LME) copper prices fell to one-month lows following China’s retaliatory tariffs, before partially recovering after some tariff exemptions and reductions were announced.
The tariffs also distorted physical supply chains. Traders rushed to deliver copper to the US ahead of the tariffs, reducing copper availability in other regions such as China. This arbitrage resulted in a significant widening of the price differential between US CME copper contracts and LME copper prices, with US prices trading at a premium of over 10% to London. This premium reflects the tariff risk embedded in the US copper price and expectations of temporary domestic market tensions.
Technical Outlook:
Technically, copper prices have shown resilience despite the tariff shocks. Copper prices sold off after peaking in late March 2025 before the tariffs were announced, but have since begun to recover.
Long-term trendlines and moving averages remain supportive, with the 100-week and 200-week moving averages trending higher and forming a bullish crossover earlier in the year.
Long-term copper prices are once again attacking the 18-year resistance around $4.50/lb ($10/kg) that capped the upside in 2008 and again in the 2010s and first half of the 2020s, with a 1.5x rally in the next 1 to 3 years.
The technical main chart of the COMEX December 2025 copper futures contract COMEX:HGZ2025
points to the possibility of an upside move, all the way to the $7 mark (around $15/kg) as early as H2 2025.
Conclusion
Going forward, copper prices are expected to remain volatile but supported by long-term structural demand growth, with the impact of tariffs likely to cause episodic disruptions rather than a sustained suppression of increasingly hot prices.
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