Copper set for biggest annual gain in 16 years, best performer among base metals

Copper was poised on Wednesday for its biggest annual gain since 2009, making it the best performer among base metals, as supply concerns and prospects of surging demand from the AI boom and energy transition powered a blistering rally.

The red metal, widely used in the power and construction sectors, is seeing a surge in investor interest due to its critical role in energy transition technologies and expanding infrastructure for artificial intelligence and data centres.

The benchmark three-month copper on the London Metal Exchange (LME) dipped 0.16% to $12,538 per metric ton by 0330 GMT, but was set to end the year with a more than 43% gain.

The most-traded copper contract on the Shanghai Futures Exchange rose 1.28% to 98,670 yuan ($14,118.71) a ton and was poised for a more than 33% yearly gain.

Copper breached several key levels this year to notch record highs, with mine disruptions, including the suspension of Freeport’s flagship Grasberg mine in Indonesia, underpinning the rally.

The London benchmark reached an all-time high of $12,960 this week, while the Shanghai contract set a record of 10,2660 yuan last week. Expectations of tight refined copper supply outside the US market, as a CME premium to the LME driven by US tariffs, have been draining LME inventories and have shifted copper stocks to COMEX sheds.

Copper stocks in the COMEX warehouses have climbed to an all-time high of 490,722 tons, according to the exchange on Tuesday, up 426.75% so far this year.

The LME reported on-warrant copper volume at 149,475 tons on Monday, a 44.91% decline. China’s plan to regulate its ever-expanding copper smelting capacity and top Chinese smelters’ plan to slash 2026 output also stoked supply worries.

Tin was poised to post the second-biggest annual gain among base metals.

Benchmark three-month LME tin declined 1.38%, but was set to end the year with a more than 42% jump.

The most-active tin in Shanghai inched 0.04% up and was poised for a near 30% annual gain.

Tin’s gain came as supply disruptions in Myanmar and Indonesia tightened flows into top consumer China.

Aluminium was also a winner for 2025, underpinned by China’s capped smelting capacity.

The London benchmark climbed 0.18% on Wednesday and was set for a near 17% annual gain, while the Shanghai contract rose 1.78% and was on track to end the year up 13%.

Nickel was also set to post a yearly gain, its first since 2023, as the Indonesian government’s plan to slash 2026 mining quota to support prices fuelled a dramatic rally in December.

London nickel declined 2.28% on Wednesday to $16,445 a ton, but was on track to end the year up more than 7%.

Shanghai nickel rose 1.34% to 131,420 yuan a ton, poised to register a 2% yearly gain.

Among other LME base metals, zinc dropped 0.37% and lead declined 0.30%.

Among SHFE base metals, zinc dipped 0.21% and lead lost 1.69%.