Copper prices experienced a significant downturn on Friday, falling more than 3 per cent as a risk-off sentiment prevailed across global markets. According to ANZ, the selloff in AI-focused stocks sparked widespread profit-taking within the base metals complex, effectively reversing gains that had been achieved earlier in the week. ANZ is a major Australian bank providing a range of banking and financial products and services to retail, commercial and institutional customers. The bank operates across Australia, New Zealand and the Asia Pacific region.
Despite the recent pullback, ANZ analysts believe this is unlikely to derail copper’s overall upward trajectory, citing robust underlying fundamentals. Renewed supply disruptions anticipated in 2025 have been a key factor driving the rally in copper and other base metals. However, ANZ suggests that the sustained duration of the rally indicates that demand strength extends beyond temporary supply shocks.
Demand has consistently exceeded expectations, even amidst concerns surrounding the global economy and slower growth in China, ANZ noted. China’s copper imports have remained elevated, buoyed by the expansion of electric vehicles and energy infrastructure. This growth has effectively counteracted weaknesses observed in the manufacturing and property sectors. Furthermore, strong demand in the United States, fueled by investments in AI-related projects and easing trade tensions, has contributed to the overall market strength.
The copper market has also faced tightening conditions due to several mine disruptions this year. ANZ pointed out that while historical supply shocks have typically led to average price pullbacks of approximately 8 per cent, instances with limited pullbacks tend to occur when demand is already strong. With current demand dynamics matching or surpassing those historical periods, ANZ has reiterated its bullish outlook, anticipating the copper market to move further into deficit.
