Copper is one of the most versatile and essential metals in today’s world. With applications ranging from electrical wiring to renewable energy infrastructure, its demand remains robust. But what does the future hold for copper prices?

We will draw on insights from our in-house experts (Boris Mikanikrezai and Andrew Cole) when exploring the current global picture. We will provide a copper price forecast for 2024 and a long-term outlook for 2025.

Global copper market outlook

As we navigate through 2024, the copper market presents a complex global picture, influenced by varying economic climates in major regions such as the US, China and Europe.

In the United States, the price of copper remains stable yet subdued, largely due to the seasonal summer lull, with premiums holding steady in the Midwest. Despite challenges, long-term optimism prevails, buoyed by potential supply imbalances and increasing demand for copper in green energy projects.

China, a major player in the copper market, witnessed a mild recovery in its physical market during August 2024. The copper grade A cathode premium in Shanghai saw an uptick, reflecting improved market conditions. This recovery is driven by expectations for better import arbitrage conditions post-LME price decline, although challenges remain due to fluctuating prices.

In Europe, the copper market remains weak, particularly in Germany – Europe’s largest consumer. Despite some demand from green energy projects, overall market conditions are bearish, with ample stock levels and sluggish performance in the manufacturing, automotive and construction sectors.

For more information on our long-term price analysis of the global copper market, see Fastmarkets’ copper 10-year long-term forecast.

Short-term copper price forecast for the remainder of 2024

In Q4 2024, copper prices are expected to experience upward pressure, driven by a more favorable macroeconomic sentiment (Federal Reserve rate cuts, stimulus in China), tighter market fundamentals (on expectations for smelter production cuts, a recovery in physical demand in China), positive seasonality (the fourth quarter typically being the strongest) and speculative positioning (rapid rebuilding of long positions). Given these factors, Fastmarkets analysts view the risk-reward profile skewed to the upside for the fourth quarter.

In China, the Shanghai premium should continue its recovery in the final quarter of the year, largely due to the improved sentiment following the substantial stimulus measures implemented by the country’s authorities.

In the US, spot market activity is projected to remain stable until the year-end, although supply availability could become a little tighter. Meanwhile, Europe might also see quiet spot activity until the remainder of the year, as most consumers are adequately covered by long-term contracts.

Improved macroeconomic conditions

China’s stimulus package, announced in September, represents a significant injection of liquidity totaling 3.95 trillion yuan ($560 billion), equivalent to over 3% of China’s GDP. The size of this package is substantial, nearing the level of support provided during the Covid-19 crisis. Alongside the Federal Reserve’s recent rate cuts, this should increase liquidity in the financial system in the coming months. Speculators have already begun to re-engage on the long side of the copper market in response. Given that the fourth quarter is historically the strongest for copper, we expect prices to average around $10,265 per tonne in Q4 2024, which would mark a record high.

Short-term challenges

Lower trading volumes and potential market volatility suggest caution. Despite the expected rise, the market remains sensitive to macroeconomic conditions and geopolitical events. Investors should keep an eye on these factors as they could impact short-term price movements.

The video below shows the relationship between global refined copper supply and demand, from 2022 through 2025.

Long-term copper price forecast for 2025 and beyond

Beyond the immediate future, the copper market and the price of copper is poised for a bullish long-term trajectory, driven by the energy transition’s escalating demand. For instance, by 2025 the copper grade A cathode premium in Rotterdam is projected to rise by approximately 25%, reflecting tighter regional fundamentals and a recovering European market.

Fastmarkets’ copper long-term outlook remains optimistic. As we move toward 2034, refined copper consumption is set to be driven significantly by sectors linked to the energy transition, including electric vehicles and renewable energy applications. The anticipated structural supply deficit will likely necessitate increased investments in production facilities, further underpinning a bullish outlook for copper prices.

Key drivers of copper demand and projected growth rates

As mentioned, refined copper consumption will be supported by demand from sectors linked to the energy transition. Some of its uses are listed below:

∙ To help connect batteries to electric vehicle (EV) powertrains
∙ For use in electric motors in the EV charging infrastructure
∙ Solar energy and wind power applications
∙ Grid connections

We expect total apparent demand for copper to rise at a compound annual growth rate (CAGR) of 2.6% in the decade to 2034. Copper consumption from energy transition sectors should grow at a CAGR of 10.7%, including 14.3% for the EV sector, 5.6% for the solar power industry and 9.3% in wind power applications. Traditional non-energy transition sectors should see a growth rate of 1.4%.

Regional copper price projections for 2025

The US copper market is expected to see a modest increase in demand, driven by government infrastructure projects and a growing emphasis on renewable energy. The supply-demand balance is likely to tighten, supporting higher copper prices.

China remains a critical player in the global copper market. The country’s focus on green energy and electric vehicles will drive significant demand. We project the Shanghai premium will average approximately $27 per tonne in 2025, reflecting a 25% decline from the estimated 2024 average. However, the long-term outlook remains positive, with expected stabilization and growth.

Key takeaways regarding copper price forecasts

The forecast for copper prices in the next 12 months is bullish. However, there are key risks to monitor, including a potential US economic recession and increased trade protectionism. The long-term forecast is also very constructive, driven by robust demand from the energy transition sectors and constrained supply dynamics.

Economists, analysts and investors should keep an eye on macroeconomic conditions, geopolitical events and industry-specific developments that could impact copper prices.

For more detailed insights and a comprehensive analysis, consider exploring Fastmarkets’ copper 10-year long-term forecast.

• Silver oscillates in a range on the last trading day of the week. 
• A mixed technical setup warrants caution for aggressive traders.
• Acceptance above $32.00 will set the stage for additional gains.

Silver (XAG/USD) struggles to capitalize on its modest intraday uptick and trades around the $31.15 region during the first half of the European session on Friday, nearly unchanged for the day.

Looking at the broader picture, this week’s bounce from the vicinity of the $30.00 psychological mark and a subsequent strength back above the $31.00 mark favors bullish traders. That said, the recent repeated failures to capitalize on momentum beyond the $32.00 mark constitute the formation of a bearish multiple-tops pattern. This, along with mixed oscillators on the daily chart, warrants caution before positioning for any meaningful appreciating move for the XAG/USD. 

From current levels, the $31.55 region is likely to act as an immediate hurdle ahead of the $31.75-$31.80 area and the $32.00 mark. This is followed by resistance near the 32.25 supply zone, which if cleared decisively has the potential to lift the XAG/USD back towards the multi-year peak, just ahead of the $33.00 round figure touched last Friday. Some follow-through buying should pave the way for a move towards the December 2012 swing high, around the $33.85 region. 

On the flip side, weakness below the $31.00 round figure now seems to find some support near the $30.70-$30.65 region ahead of the $30.35-$30.25 area and the $30.00 mark. The next relevant support is pegged near the $29.80-$29.70 confluence – comprising the 100-day Simple Moving Average (SMA) and the 50-day SMA. This should act as a key pivotal point, which if broken will set the stage for an extension of the recent decline from the highest level since December 2012. 

The XAG/USD might then accelerate the downfall towards the $29.00 mark before eventually dropping to test the $28.60-$28.50 zone. The descending trend could extend further towards the $28.10-$28.00 region en route to the September monthly swing low, around the $27.70 area.

Silver daily chart

• Gold price looks to extend the bounce from three-week lows ahead of US PPI data.    
• The US Dollar gives back US CPI-led uptick amid employment concerns, hawkish Fedspeak ignored.
• Gold price finds footing again above 21-day SMA at $2,627, more recovery likely?

Gold price is looking to build on the previous recovery from three-week lows of $2,604 early Friday. Broad risk aversion and a modest US Dollar (USD) downtick support Gold price heading into the US Producer Price Index (CPI) data release due later on Friday.

US jobs worries outweigh hot inflation, lifting Gold price

Gold price continues to cheer the unfazed odds of a 25 basis points (bps) interest rate cut by the US Federal Reserve (Fed)  in November. Markets currently price in about an 86% chance of such a move next month, according to the CME Group’s FedWatch Tool.

The health of the US labor market remains a concern for investors after Initial Jobless Claims surged by 33,000 last week to a seasonally adjusted 258,000 for the week ended October. 5. Discouraging US jobs data overshadowed the hot Consumer Price Index (CPI) inflation data for September, keeping the November rate cut hopes alive and kicking.

 US annual CPI inflation dropped from 2.5% in August to 2.4% in September, the lowest level since February 2021, although still came in above the estimated 2.3% print. The CPI increased by 0.2% over the month in September, matching August’s increase and surpassing 0.1% expectations. 

Therefore, the US Dollar failed to sustain its recovery momentum and pullback from two-month highs against its major rivals, as short-term two-year US Treasury bond yields tumbled. This helped Gold price stage a comeback from multi-week troughs.

The USD retracement was partly sponsored by the USD/JPY slide, fuelled by hawkish comments from Bank of Japan (BoJ) Deputy Governor Ryozo Himino, who said on Thursday that “if the outlook for economic activity and prices presented in the July report is achieved, the BoJ will accordingly raise interest rates.”

Late Thursday, slightly hawkish commentary from Atlanta Fed President Raphael Bostic was unable to lift the sentiment around the Greenback, leaving the buck on the back foot ahead of Friday’s US PPI inflation data.

Bostic said in a Wall Street Journal (WSJ) interview that he would be “totally comfortable” skipping an interest-rate cut at an upcoming meeting of the US central bank. He added that the “choppiness” in recent data on inflation and employment may warrant leaving rates on hold in November.

The dovish sentiment around the Fed rate cut expectations could be tested on the US PPI report, significantly impacting the value of the US Dollar and Gold price. The US PPI is seen easing to 1.6% YoY in September while the annual core PPI inflation is set to rise to 2.7% in the same period, against a 2.4% growth reported previously.

Gold price could continue to draw support from increased optimism about China’s fiscal stimulus package due to be rolled out on Saturday. Meanwhile, speeches from several Fed policymakers will also keep Gold traders entertained.

Gold price technical analysis: Daily chart

Buyers refused to give up on Thursday and jumped back into the game even after Gold price closed Wednesday below the key 21-day Simple Moving Average (SMA) support, then at $2,619.

Gold price recaptured the 21-day SMA support-turned-resistance, now at $2,628, on a daily closing basis on Thursday, reviving the uptrend.

The 14-day Relative Strength Index (RSI) looks north above the 50 level, suggesting that there is scope for more upside.

The next bullish targets for Gold price are seen at the $2,650 psychological barrier and the intermittent highs near $2,670.

On the downside, the immeddate support is seen at the three-week lows near the $2,600 threshold. A sustained break below the latter could extend the downside toward the September 20 low of $2,585.

Further declines could challenge the $2,550 demand area, where the 50-day SMA aligns.