Copper Price Analysis and Forecast: Long-Term Potential Despite Short-Term Volatility

Based on market analysis from reputable sources like Investing.com, TradingView, and SMM Copper Morning Brief reports, copper prices are expected to maintain a positive long-term trend, despite potential short-term fluctuations. A combination of macroeconomic factors and fundamental supply-and-demand dynamics points to an optimistic outlook for this industrial metal.

Market Overview and Macroeconomic Factors

Global copper prices have recently experienced notable volatility. According to data from Investing.com, copper futures on the London Metal Exchange (LME) have fluctuated around $9,700–$9,800 per ton. Specifically, in the most recent trading session, LME copper opened at $9,737.5 per ton, saw a slight correction, and then closed at its daily high of $9,752 per ton. In China, copper futures contracts on the Shanghai Futures Exchange (SHFE) showed similar fluctuations.

Key macroeconomic factors include:

• Global Politics: Political negotiations between the U.S., Russia, and Ukraine, along with developments regarding the ceasefire in Gaza, are creating a volatile market environment.
• Chinese Economy: The Chinese government is focusing on measures to stimulate consumption and stabilize the real estate market. These are significant moves for copper demand, as China is the world’s largest consumer of the metal.
• Tariff Policies: Reports from Investing.com and UBS highlight new tariffs, effective August 1st, that target semi-finished copper products while exempting copper cathodes and ore. This could impact trade flows and the supply of finished copper products on the global market.

In-Depth Analysis of Supply, Demand, and Inventory

Experts believe the copper market will remain in a supply deficit, especially in 2025 and 2026. This is a crucial factor that reinforces the positive long-term view on copper prices.

Supply:

• Import Supply: A continuous flow of imported copper into major markets, particularly China, has increased inventories and put pressure on spot premiums.
• Domestic Supply: In China, the world’s largest copper market, domestic supply of copper cathodes remains tight, while supply from recycled copper is showing signs of decline due to tariff policies.

Demand:

• After a quiet period, copper consumption is starting to show a slight recovery, especially in China.
• Industries such as renewable energy and electric vehicles (EVs) continue to be the main drivers of copper demand, creating a significant shift in the demand structure.

Inventory:

• LME copper inventories are showing a slight downward trend, while SHFE inventories have increased, indicating different supply and demand dynamics between regions. Data from August 18th showed that SHFE inventories rose by 938 tons.

Insights from Organizations and Experts

• UBS’s View: According to Investing.com, the bank UBS maintains an optimistic outlook, forecasting that copper prices will hold above $10,500 per ton through mid-2026. UBS considers any price dips to be buying opportunities, as the fundamental market remains in a deficit.
• Global Experts: Analysts at SMM (Shanghai Metals Market) suggest that in the short term, copper prices may face upward pressure due to a lack of new macroeconomic momentum and increasing supply. However, in the long term, fundamental supply and demand factors will support prices.

Regional Outlook:

• North America and Europe: Copper demand is expected to increase significantly due to green infrastructure investment policies, such as solar and wind projects and EV charging networks.
• Asia: China will remain the decisive factor. The government’s economic stimulus efforts will directly influence copper demand in key industries.
• South America: Major copper-producing nations like Chile and Peru could face political and social risks, which might affect global production and supply.

Copper Price Trend Forecast

Based on these factors, we can draw a few key conclusions:

Short-Term: Copper prices may continue to trade within a narrow range due to a lack of clear macroeconomic drivers and increased import supply in major consuming markets. Investors should closely monitor global political and economic developments, especially Chinese policies.

Long-Term: The outlook for copper prices remains very positive. Demand from green industries and a persistent supply deficit will be the main drivers of price increases. UBS and many other experts believe that copper prices will see a stable and sustainable upward trend over the next one to two years.

Will China’s economic stimulus measures be strong enough to drive sustainable copper demand and return copper prices to a strong upward trajectory?

This article is for informational purposes only. Readers should consult other sources and monitor actual market developments and related policies to make informed decisions.

Source: Investing, TradingView, SMM Copper Morning Brief, and various internet sources.