After two years of falling prices, copper finally saw a comeback in 2024, rising about 3% following double-digit drops in 2022 and 2023. The metal started strong last year, climbing past

5perpound—a level not seen in years — before losing steam in the second half. By December, prices slipped back toward 4 as global economic jitters, especially in top consumer China, cast a shadow over demand.

2025’s Promising Start

Copper kicked off 2025 with a 5% price surge in just the first week, defying expectations. Even a stronger U.S. dollar—which typically weighs on commodity prices—couldn’t slow its momentum. Analysts point to several factors that could keep the rally alive:

China’s Stimulus Surge

Beijing is pulling out all the stops to boost its economy. With fears of renewed U.S. trade tensions under a potential Trump administration, China’s focus has shifted to propping up domestic spending. Recent moves include:

- A historic $409 billion bond issuance to fund projects

- Wage hikes for millions of government workers (adding $20 billion to household budgets)

- Subsidies encouraging consumers to upgrade electronics and appliances

Despite tight copper ore supplies, Chinese smelters plan to ramp up production this year. Lower processing costs for copper concentrate could help offset weaker global prices, keeping profits stable.

U.S. Supply: A Slow Burn

While the U.S. may ease mining regulations to boost domestic copper production, don’t expect relief soon. New mines take years—often decades—to become operational. For now, American demand looks set to grow, driven by:

- Ongoing construction of AI data centers

- Expanding electric vehicle manufacturing

- Potential Federal Reserve rate cuts stimulating industrial activity

Trading Outlook: Buckle Up

Many analysts see copper retesting $5 per pound in 2025, but the path will be rocky. Two key factors to watch:

- Trade War Risks: Renewed U.S.-China tensions could rattle markets, though China’s domestic focus might cushion the blow.

- Short Squeeze Potential: Traders’ bearish bets hit record highs late in 2024. If prices keep rising, these short positions could unwind rapidly, fueling sharper gains.

From electric cars to smart factories, copper remains the backbone of the green tech revolution. While 2025’s story is still being written, one thing’s clear—this industrial metal’s relevance isn’t fading anytime soon.