What's happened
Copper futures on the London Metal Exchange reached a record $11,200 per metric ton, driven by supply disruptions and rising demand from energy and AI sectors. Major miners report lower output, with forecasts indicating a market deficit next year amid geopolitical and environmental challenges. The outlook remains bullish but cautious.
What's behind the headline?
Copper's record run in 2025 is driven by a combination of supply constraints and surging demand, particularly from sectors related to clean energy and AI. Major miners' production setbacks, including incidents at mines in Chile, Congo, and Indonesia, have tightened supply. The forecast of a 150,000-ton deficit next year underscores the market's structural imbalance.
However, the rally is not without risks. Chinese buyers are showing price sensitivity, which could cap further gains. Additionally, macroeconomic factors like a weaker dollar and geopolitical developments, such as Trump's meeting with Xi Jinping, are supporting prices temporarily. Yet, demand destruction remains a real threat, especially if Chinese demand weakens or if global economic conditions deteriorate.
Looking ahead, copper prices will likely stay elevated but volatile, with the potential for corrections if demand wanes or supply improves unexpectedly. The market's tightness suggests that prices will remain sensitive to geopolitical and macroeconomic shifts, making the outlook cautiously bullish.
What the papers say
Business Insider UK reports that copper hit a record $11,200 amid supply disruptions and rising demand, with miners like Anglo American and Glencore lowering forecasts due to operational issues. Bloomberg highlights that CMOC plans to increase copper output by 100,000 tons in 2027, with BHP's quarterly report noting a 4% rise in production driven by Escondida. These sources collectively depict a market under pressure from supply constraints and growing demand, with some optimism about future capacity increases but caution about demand sensitivity, especially from China.
How we got here
Copper prices have been volatile in 2025, influenced by supply chain disruptions, geopolitical tensions, and increased demand from the energy transition and AI infrastructure. Major miners like Anglo American and Glencore have reported lower production, while forecasts now predict a deficit in 2026, reversing this year's surplus. Market sentiment has been affected by tariff uncertainties and broader macroeconomic factors such as currency movements and China's resilience.
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