Copper experienced its most favorable year since 2009, propelled by short-term supply constraints and expectations that the demand for this metal crucial in electrification will exceed production.
The red metal has registered a string of all-time peaks towards the end of the year, surging 42% on the London Metal Exchange this year. This makes it the top performer among the six industrial metals on the exchange. Prices decreased by 1.1% on Wednesday, which was the last trading day of 2025.
The recent increases have also been spurred by traders hurrying to transport copper to the US in anticipation of possible tariffs, causing tightness in other areas. Trump’s plan to revisit the issue of tariffs on primary copper in 2026, which shook the market earlier in the year, further tightened availability elsewhere even as underlying demand in key buyer China has weakened. That price differential narrowed recently during a strong December rally on the LME.
Natalie Scott-Gray, a senior metals analyst at StoneX Financial Ltd., wrote, “The expectation of future US import tariffs on refined copper has led to over 650,000 tons of metal entering the country, creating a shortage outside the US.” She mentioned that two-thirds of global visible stocks are now held within COMEX.
Along with the tariff-induced flows, a fatal accident at the world’s second-largest copper mine in Indonesia, an underground flood in the Democratic Republic of Congo, and a fatal rock explosion at a mine in Chile have all further strained the availability of the metal.
The short-term outlook for copper demand growth has been overshadowed by weakness in China, the world’s largest consumer of this red metal. The country’s property market has been mired in a multi-year slump, reducing the need for copper plumbing and wiring, while sluggish consumer spending has impacted the demand for finished products like electronic appliances.
Nonetheless, strong momentum in global copper demand is anticipated in the long run. BloombergNEF projects that consumption could rise by more than a third by 2035 in its base case scenario.
The factors behind this trend include the continuing shift to cleaner energy sources like solar panels and wind turbines, the increasing adoption of electric vehicles, and the expansion of power grids.
Copper closed 1.1% lower at $12,558.50 per ton in London. Prices reached a record high of $12,960 on Monday.