In 2025, copper is the reason behind a major rewrite of commodity market history. The price surge has been largely driven by dwindling supplies, the risk of a geopolitical conflict, and anxiety about new tariffs by the United States.
Copper reached a new record this week with a price of $11,952 per metric ton. The London Metal Exchange three, month contracts were trading just below that level. Copper futures in New York are already 34% higher this year and are on track for their best yearly performance since 2009.
According to BHP mining giant's CEO, Mike Henry, copper is not just a regular commodity. While talking to CNBC, Henry referred to copper as a "critically important" metal that forms the basis of the global economy. Copper is the common denominator in the future of the world as a net, zero economy. The metal is used in electrification, construction, industrial machinery, decarbonization, and digitalization, among others.
Meteorically, Henry himself outlined the market by pointing out that copper is an industry worth $300-400 billion per annum, thus being much larger than the market for rare earths. Nevertheless, in a similar way to rare earth minerals, copper is currently facing enormous supply challenges just as demand is skyrocketing.
BHP projects that copper demand worldwide will increase 70 percent by the year 2050 the main drivers being electric vehicles, renewable energy, and data infrastructure. What is the problem then? The supply side is struggling to keep up. According to Henry fewer new mines are being discovered, and the ones that are found are smaller, of lower grade, and more difficult to access.
Copper was expected to remain soft in 2025 as late as a year ago. However, a few mining disruptions changed the whole picture, resulting in a market deficit and copper prices shooting up. Henry says that this shortage of supply is going to become even more severe towards the end of the decade.
Large international banks are now supporting the bullish scenario. UBS refers to a structural bull market being the case that is unfolding and thus upgrading commodities to Attractive category. The bank is copper prices going to hit $12, 000 per ton by the first quarter of 2026 and $13, 000 by the end of next year.
Deutsche Bank also presents a very constrained picture. The analysts foresee that worldwide mining output will decrease by almost 3 percent in 2025 and will only slightly increase in 2026 but still be lower than that of 2024. Taking into account the usual disruptions, there is a possibility that supply will be in shortfall again next year thereby keeping the market at a deficit.
Citi goes even further in its prediction. The bank sees copper stockpiling in the United States as a major driver of the metal reaching $13, 000 a ton in the beginning of 2026 and possibly $15, 000 by the second quarter of the following year.
Henry, however, warns that price prediction is tricky but he still keeps one thing in his mind: the market is tight and it will not take much for the prices to be lifted. Besides that, gold and silver are also setting records and thus broader investor interest in commodities could be the additional driver of coppers rise.
With demand situation becoming more and more favorable, supply situation more and more constrained, and CEOs and banks bullish sentiment on copper unanimous, coppers rally may well have a next leg in the game. For investors, the red metal is increasingly being seen not just as an industrial input but as a long, term strategic asset.
