Copper prices recorded their largest annual gain since 2009, surging 42% on the London Metal Exchange in 2025. This significant rally was driven by expectations of supply tightness and a growing demand for copper, a crucial metal in electrification technologies. The price surge included a series of all-time highs, making copper the top-performing industrial metal this year. However, prices dipped by 1.1% on the last trading day of 2025, reflecting volatility in the market.
Market Influences and Supply Concerns
Traders rushed to ship copper to the United States, anticipating potential tariffs under the administration of Donald Trump. This preemptive move has created supply tightness in other regions. As noted by Natalie Scott-Gray, senior metals analyst at StoneX Financial Ltd., “The expectation for future US import tariffs on refined copper has resulted in more than 650,000 tons of metal entering the country, creating tightness ex-US.” Currently, two-thirds of global visible stocks are held within COMEX.
In addition to tariff-related dynamics, several unforeseen events have exacerbated supply issues. A deadly accident at the world’s second-largest copper mine in Indonesia, an underground flood in the Democratic Republic of Congo, and a fatal rock blast at a mine in Chile have all contributed to reduced availability of the metal.
Long-term Demand Projections
The outlook for copper demand growth is mixed, particularly due to recent weaknesses in China, the largest consumer of copper. The country’s property market is experiencing a prolonged downturn, which has diminished the need for copper in plumbing and wiring. Additionally, sluggish consumer spending has negatively impacted the demand for finished goods, including electronic appliances.
Despite these short-term challenges, long-term prospects remain optimistic. BloombergNEF projects that global copper consumption could increase by over a third by 2035, driven by the transition to cleaner energy sources such as solar panels and wind turbines, increased adoption of electric vehicles, and the expansion of power grids.
The copper market’s fluctuations reflect broader economic trends and the ongoing demand for critical materials in a rapidly changing energy landscape. As industries adapt to new technologies and energy solutions, the role of copper remains pivotal in shaping future developments.