Citigroup is optimistic about next year's market, with copper prices reaching a record high of USD 11,581 per ton | Lianhe Zaobao
Citigroup analysts predict that copper prices will continue to rise before 2026, averaging $13,000 per ton in the second quarter of next year. Following the report's release, copper prices increased by 1.2% to $11,581 per ton. Traders expect a misalignment in copper supply, potentially leading to shortages in other regions due to U.S. stockpiling of copper. Over the next decade, the copper market will face structural shortages due to strong demand
Multiple favorable factors support the outlook, including gradually improving fundamentals and macroeconomic conditions. Citigroup analysts firmly believe that copper prices will continue to rise before 2026.
On Friday (December 5), Citigroup analysts released a report predicting that due to U.S. stockpiling of copper, leading to shortages in other regions, copper prices will average USD 13,000 (SGD 16,840) in the second quarter of next year. Following the report, copper prices rose 1.2% to USD 11,581 per ton, surpassing the new high set earlier this week.
Traders expect a misalignment in copper supply, possibly due to more metal flowing into the U.S. before the imposition of import tariffs. The copper market is expected to face structural shortages next year, with supply constrained by strong demand over the next decade, leading to an expanding gap.
According to Bloomberg, citing informed sources, trader Mercuria Energy has booked approximately USD 500 million (SGD 647.8 million) of copper from the London Metal Exchange (LME).
However, analysts at Macquarie Group stated, "Although copper is expected to remain in a 'volatile' state and may easily reach new highs, prices above USD 11,000 per ton are difficult to sustain, as there is no physical shortage in the global market."
Bloomberg reported in March this year that with increasing demand for energy transition and escalating geopolitical tensions, China plans to increase its strategic reserves of key industrial metals this year to enhance the resilience of critical mineral supplies. The scale of China's purchases suggests it could have a significant impact on market prices.
As of 11:20 AM on Friday, copper prices on the London Metal Exchange rose 1.1% to USD 11,572.5 per ton. Other metal prices also saw slight increases, with aluminum up 0.1% and zinc up 0.3%
