Copper prices have experienced a significant surge in response to the threat of tariffs by US President Donald Trump and concerns over a global supply deficit. The market has been influenced by the potential impact of new tariffs on US imports, with President Trump hinting at a 25% tariff during a recent address to Congress. Additionally, the US Commerce Department’s investigation into the copper market has added to the uncertainty.

JP Morgan, a prominent investment bank, has projected a bullish outlook for copper prices, estimating a rise to US$11,000 per metric ton in the upcoming year. This forecast is attributed to an anticipated global deficit in refined copper, expected to reach 160,000 metric tons by 2026. The bank also foresees the implementation of tariffs on refined copper imports by the US government, potentially reaching 10% initially and possibly escalating to 25%. This tariff threat could lead to a buildup of copper stocks in the US, causing supply shortages globally and driving prices upwards.

China’s demand for copper is expected to slow down, from 4% growth last year to 2.5% this year, posing a significant risk to the tightening copper market as forecasted by JP Morgan. On the other hand, S&P Global has a more cautious stance on copper pricing, citing concerns about the strength of the US dollar and the impact of new US policies that may restrict price gains. Their forecast for the 2025 LME three-month copper price stands at US$9,716 per metric ton, reflecting a moderate year-on-year increase of 4.8%.

Looking ahead, S&P has identified 139 copper mining projects set to begin in the next twenty years, with a focus on brownfield projects accounting for a majority of the committed capacity. Latin America is projected to play a significant role in global copper output, contributing an average of 42.9% from 2025 to 2035. The global refined copper market displayed a deficit of 22,000 metric tons in December, marking a shift from the surplus seen in November.

While the copper market is poised for growth, uncertainties stemming from US policies and global supply dynamics continue to influence price forecasts. The evolving landscape of tariffs and supply-demand fundamentals will play a crucial role in shaping the trajectory of copper prices in the coming years.