Copper prices edged closer to all-time highs after the Federal Reserve announced a rate cut and maintained expectations for further easing next year, lifting other metals as well. London Metal Exchange futures initially rose 1.5% before giving up more than half of those gains. The Fed delivered its third consecutive rate cut but tweaked language to signal greater uncertainty about future reductions. Meanwhile, China's top policymakers pledged Monday to maintain "moderately loose" monetary policy and adopt more proactive fiscal measures, providing additional support. Chinese trade data also bolstered copper, with exports rebounding beyond expectations last month—pushing the nation’s annual trade surplus above $1 trillion for the first time.
The industrial metal has rallied this year, gaining over 30% amid accommodative policies and tightening supply. Mine disruptions and fears of shortages outside the U.S. have further boosted prices as traders stockpile copper ahead of potential tariffs. Long-term renewable energy demand growth is expected to sustain prices. CITIC Securities analysts warned of a 450,000-ton global refined copper deficit by 2026, partly due to U.S. hoarding. They stressed that prices must average above $12,000/ton next year to incentivize new mine investments and ensure adequate mid-term supply.
ING’s latest copper report highlights a supply-driven "tight balance" in 2025, with price floors elevated above $11,000/ton. However, further upside hinges on Chinese demand. The bank projects 2026 LME copper at $11,500/ton, peaking near $12,000 in Q2 before moderating if tariff exemptions materialize.
Citi and JPMorgan joined the bullish camp. Citi expects U.S. inventory builds and shortages elsewhere to drive Q2 averages to $13,000/ton under its base case, while JPMorgan sees $12,500/ton by Q2 2026 ($12,075 full-year average).
Gold Sachs struck a cautious note, viewing the recent breach of $11,000/ton as temporary and driven by expectations rather than fundamentals, forecasting 2026 prices between $10,000-$11,000. Macquarie’s Peter Taylor echoed that while volatility and new highs are likely, prices above $11,000 aren’t sustainable given adequate physical supply.
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