LONDON: Copper prices fell on Tuesday but were on track for a second consecutive yearly gain, while the red metal’s outlook for next year hinges on China’s economic recovery and US President-elect Donald Trump’s policies.
Three-month copper on the London Metal Exchange (LME) was down 1.5% at $8,781.5 per metric ton by 1647 GMT. It has gained 2.6% so far for the year.
“Supply setbacks at global mines contributed to a tightening in the global copper market... On the demand side, industrial recovery in key economies, alongside demand from the green energy transition, helped support prices,” Aneeka Gupta, director of macroeconomic research at WisdomTree, said of the market’s performance in 2024.
In May, copper prices scaled a historic high of $11,104.50, fuelled by a fund-buying frenzy. But, since then, prices have fallen 20% — pressured by a strong dollar, import tariff threats and persistent doubts over China’s recovery.
China, the biggest commodity consumer, has struggled to recover amid weak consumption and a protracted property crisis. However, policymakers hope a recent blitz of fiscal and monetary measures will spark a turnaround.
Meanwhile, Trump threatened tariffs in excess of 60% on Chinese goods during his campaign.
“Uncertainty around the scope and fallout of any possible trade wars under the incoming Trump administration could cast a cloud over industrial metals demand,” said Tim Waterer, chief market analyst at KCM Trade.
“If 2025 sees a continuation of the Chinese economic malaise, this could be a headwind for the copper price.” LME aluminium edged up 0.1% to $2,553.50 a ton and added 7.1% this year, aided by a raw material shortage.
Prices of alumina, the main ingredient for making primary aluminium, rallied this year due to supply disruptions.
LME zinc dropped 1.3% to $2,979.50, but rose 12.2% for the year. Tin fell 1.3% to $28,915 but was set to register an annual gain of 13.8%.
LME nickel dropped 0.5% to $15,340, while lead was 0.4% higher at $1,955. The metals were poised for annual losses of 7.6% and 5.5%, respectively.
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