Quarterly Review of Copper Prices for 2025 Q2
In the second quarter of 2025, the price of copper, often considered a safer commodity bet, experienced a dramatic surge and subsequent plunge. This rollercoaster ride was primarily driven by a combination of heightened demand, supply constraints, and market uncertainty.
The surge was fueled by a robust demand outlook, bolstered by China's economic stimulus measures, the growth of renewable energy, and advancements in AI technologies. These factors pushed consumption above refined output growth by around 3.3% in early 2025.
Supply disruptions and constraints also played a significant role. Major mines, such as Cobre Panama and Chuquicamata, experienced closures, and Chinese smelters reduced output due to lower profits, impacting concentrate availability.
Additionally, front-loading of imports in anticipation of U.S. tariffs led to a large buildup in inventories, especially in the U.S. where refined copper imports jumped 129% year-over-year through May 2025.
Market volatility and uncertainty related to tariff threats and fears of a global economic recession created speculative trading and investment, causing wide price swings. Copper prices plunged from a record high in March but then rebounded and surged further from late June onwards, reaching a new all-time high on July 10.
Despite increased production from major players like Rio Tinto in Q2 2025, supply remained imbalanced, with a shortage of standard-quality copper and ongoing bottlenecks in solvent extraction-electrowinning (SX-EW) copper supply.
The price surge caused prices on the COMEX to spike to record highs, triggering panic buying among traders. However, the administration announced a 50 percent tariff on all copper entering the US on July 8, which may have contributed to the subsequent plummet in copper prices.
The tariffs caused large declines in major US indexes, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite losing 9.5 percent, 10 percent, and 11 percent respectively in two days. The move caused prices on the COMEX to plunge, and the world's dependence on copper, coupled with increasing demand, has not been met with a significant increase in supply.
In fact, there aren't enough copper projects in the pipeline to significantly increase supply. This, combined with the volatility in the market, suggests that the price of copper may continue to be a rollercoaster ride in the near future.
[1] Source 1 [2] Source 2 [3] Source 3 [5] Source 5
The surge in copper price was attributed, in part, to robust demand driven by factors such as China's economic stimulus measures, growth of renewable energy, and advancements in AI technologies (Source 1). The finance sector was closely watchign the copper market, as the volatility led to speculative trading and investment, causing wide price swings (Source 3).
