Copper prices could fall towards $8,500 a metric ton within the next four months on expectations that demand will be hurt by potential trade disruptions when Donald Trump returns to the White House in January, copper industry participants said.
Benchmark three-month copper on the London Metal Exchange (LME) CMCU3 was traded at $8,915 a ton at 0852 GMT, having shed 8% in less than 10 days since Trump won the U.S. presidential election.
The pressure on prices reflects heightened concerns around the impact on growth from potential trade policy from the new U.S. administration, analyst Nicholas Snowdon of Mercuria Energy Trading told the CRU World Copper Conference Asia.
Near-term prices are also being suppressed by the weight of inventory, Snowdon said, forecasting a surplus of nearly half a million tons in the first quarter of 2025 due to stock build-up during the Chinese New Year holiday starting in late January and demand weakness in the West.
“It is quite feasible that by March, we will be sitting on global cathode stocks of just over a million tons,” he said.
LME copper could fall to $8,500 by the end of the first quarter next year, most traders, producers, brokers and analysts surveyed by Reuters said during the annual copper industry gathering this week in Shanghai.
Others at the event said they expect prices to range between $9,000-$9,500 next year, citing similar fundamentals to 2024.
A strong dollar, boosted by its safe haven status, will also make dollar-priced copper more expensive to holders of other currencies, said a broker and an analyst.
Citi analysts on Wednesday revised down their copper price forecast to $8,500 a ton within three months, from $9,500 previously, due to likely U.S. trade tariff hikes and weaker-than-expected Chinese stimulus so far.
But prices are unlikely to fall below $8,500 because buyers would snap up copper at that level, which is more than 20% below the historic high hit in May this year of $11,104.50, a China-based analyst said.
Project Blue analyst Jonathan Barnes said LME copper prices could average between $9,300-9,400 over the next three months, with a near-term dip towards $8,500 possible as markets digest the implications of a Trump presidency, with 2025 prices seen averaging between $9,475 and $9,575.
In the longer-term, prices are likely to be supported by demand driven by possible Chinese stimulus moves next year, analysts said.
Copper prices are also cushioned by disruptions in mine supply, with analysts forecasting a deficit next year to range from 500,000 tons to above 1 million tons, forcing smelters to cut cathode output.
CRU expects the copper price to recover to $10,000 by the end of March 2025 and potentially hit $15,000 by 2029, backed by energy transition demand and mine supply tightness.
“In the near term (there is) downside risk for price, but the structural story is not dead … and we do see that starting to prevail more through the mid-second half of next year,” Mercuria’s Snowdon said.
Source: Reuters (Reporting by Mai Nguyen and Amy Lv in Shanghai. Editing by Jane Merriman)
