Copper prices faced considerable pressure in 2022 as a result of global recession concerns, reduced demand from major Chinese manufacturers, China’s zero-Covid strategy, and a stronger US dollar. In fact, on June 2022 the price of copper dropped to $3.30 per pound, its lowest level since the start of COVID. Since the start of 2023, copper has rebounded quite healthily and is showing signs of strength. Many top analysts and macroeconomists are optimistic about the copper price forecast by 2025.
Copper Is Heading for a ‘Generational Shift’ – Al Chu, BNY Mellon
One of the primary factors driving copper demand is the global shift towards renewable energy and electric vehicles (EVs). Both these industries rely heavily on copper due to its excellent electrical conductivity and resistance to corrosion. As countries continue to adopt cleaner energy sources and phase out fossil fuels, the demand for copper is expected to surge.
By 2025, it’s projected that renewable energy capacity will grow significantly, with solar and wind power installations requiring substantial amounts of copper. Similarly, the rising adoption of electric vehicles will increase demand for ‘the red metal’ in charging infrastructure, motors, and batteries.
European Defense Spending To Bolster Copper Markets – Ole Hansen, Saxo Bank
A new geopolitical landscape will result in a massive boost for copper demand from the European defense industry, with growth rates nearing 20% per year. Speculation suggests that Beijing, the world’s top consumer, might increase its financial support to the economy, similar to its actions in 2003, 2009, and after the 2016 currency devaluation. Hansen also believes that industrial metals like copper, aluminum, and lithium would benefit from significant political investments in the “green transformation.
Copper Is The New Oil – Jeffrey Currie, Goldman Sachs
Goldman Sachs reports that Chinese copper demand increased by 13% year on year in February, following a boost in activity after the lunar new year. Copper prices are expected to reach $10,500 per tonne in the short term and hit $15,000 by 2025.
Jeffrey Currie, Global Head of Commodities Research at Goldman Sachs, expressed an exceptionally positive outlook on the future of copper. He likened copper’s potential in the 2020s to oil’s performance in the 2000s, pointing to the 5% supply-demand gap that propelled Brent crude from $20 to nearly $150 a barrel, compared to copper’s projected 15% deficit this decade.
Declining Ore Grades Will Drive Markets – Robert Friedlander, Mining Billionaire
Industry leaders assert that increasing new copper supplies is becoming more challenging due to declining ore grades. Mining magnate Robert Friedland shared with the Financial Times that it took him 28 years to develop the extensive Kamoa-Kakula mine in the Democratic Republic of Congo, which aims to produce 650,000 tonnes by the end of next year.
While it’s challenging to predict the exact price of copper in 2025, several factors will likely influence the market. Rising demand from renewable energy and electric vehicle industries, potential supply shortfalls, geopolitical factors, and the value of the US dollar will all play a part in determining copper prices. Investors and businesses should keep a close eye on these factors to capitalize on trends and navigate the red metal market in the coming years.
Is Copper a Good Investment For You?
Top analysts are striking a positive tone about the future of copper as an investment. The recent rebound in copper prices and the projected surge in demand from renewable energy and electric vehicle industries indicate a positive outlook. The global shift towards cleaner energy sources and the need for copper in charging infrastructure, motors, and batteries for electric vehicles is expected to drive demand. Additionally, the European defense industry’s increasing demand and potential supply shortfalls further contribute to the bullish sentiment surrounding copper.
While the exact price of copper in 2025 is difficult to predict, investors and businesses should closely monitor factors such as demand trends, geopolitical developments, and the value of the US dollar to make informed decisions in the dynamic copper market. If you’re looking for a guide on the best way to invest in copper, look no further, the GOAT got you covered.