Copper prices on the London Metal Exchange (LME) have soared, closing 1.5 per cent higher at $US11,620.50 a tonne on Friday. Earlier in the day, the industrial metal reached a record high of $US11,705 a tonne, surpassing the previous all-time high from earlier in the week. This surge is partly driven by a bullish price outlook from Citi analysts, who foresee a potential shortage due to increased stockpiling in the United States.
Citi analysts, including Max Layton, anticipate copper averaging $US13,000 a tonne in the second quarter. In a note on Friday, they stated, “We have conviction in copper upside through 2026 supported by multiple bullish catalysts, including an incrementally constructive fundamental and macro backdrop.” They forecast a 2.5 per cent rise in global end-use consumption next year, attributing growth to a lower interest-rate environment and fiscal expansion in the US, along with European rearmament and the energy transition.
Copper, essential for pipes, power cables, and electric vehicles, has increased in value by more than 30 per cent on the LME this year. The recent rally has intensified due to growing worries about a metal exodus to the US, prompted by expectations of import tariffs next year. This anticipated shift is expected to deplete inventories in other key global locations, further contributing to the price surge. Traders are closely watching inventory levels and import/export data to gauge the full impact of these market dynamics on future prices.
