Copper price volatility to persist on tariff risks

The global copper market has resembled a rollercoaster ride in recent weeks.

After surging to a record high in late March amid concerns over U.S. tariffs, the metal quickly plunged into bear territory as macroeconomic fears took over the narrative. Prices have since rebounded as trade tensions eased and sentiment improved in top consumer China.

The volatility in copper is likely to persist in the near term, with reciprocal tariffs posing downside risk to demand for the industrial metal, says Emily Brugge, a senior research analyst at Wood Mackenzie.

In a presentation this week, she highlights a divergence in demand outlook across regions, with India and Indonesia set to lead all nations in consumption while others like Japan and Italy are forecast to see declines.

In the long run, however, Brugge says demand will be supported by the energy transition, namely growth in electric vehicle (EV) use and the expansion of electrical grids.

On the supply side, Wood Mackenzie is projecting a 0.6% increase in global mine output this year, incorporating the 2025 guidance set by some of the world’s biggest copper producers. But to meet growing demand over the next decade, the consultancy estimates that about 900,000 tonnes of new mine projects must be sanctioned each year.

Brugge points out that just building copper mines is not enough to achieve supply security; limited processing capacity in places like the United States means its production of refined copper cannot be maximized.

She also noted that the copper concentrate market will remain tight as the expansion of smelters’ rough smelting capacity, particularly in China, is far outpacing the supply growth from mines.