Copper set for a comeback in 2025 according to analysts
With prices rebounding in recent weeks and two of the world’s largest miners declaring plans to ramp up production, analysts are tipping 2025 to be a big year for copper.
Copper futures traded around US$4.14 per pound overnight, hovering close to three-week highs after a brief rally earlier in the week.
According to Trading Economics, the price surge was driven by speculation that Beijing may announce additional stimulus measures during key political meetings this month.
Recent data showed that Chinese manufacturing activity expanded for the second consecutive month in November, strengthening the demand outlook for copper.
Majors bullish
BHP Group (ASX: BHP) and Rio Tinto (ASX: RIO) have both declared their support for the base metal, recently announcing plans to ramp up copper production.
When releasing its FY24 results, BHP stated it had grown its overall copper volumes by 9% for the second consecutive year and expected to deliver a further 4% in FY25.
Chief executive officer Mike Henry told shareholders the company has a pipeline of copper projects under development in Chile and Australia.
Meanwhile, Rio Tinto said this week it is aiming for 780,000 to 850,000 tonnes of group copper production, with its Oyu Tolgoi project expected to supply a 50% increase.
Steady growth
ResearchAndMarkets.com has estimated the copper market’s value stood at approximately $417 billion (US$269b) in 2024 and is set to grow at a compound rate of 5.4% to reach a projected $572b (US$369b) by 2030.
The new report said global demand for copper has been growing steadily, with a 300% increase in the use of refined copper across various industries over the last five decades to about 26.5Mt in 2023.
Copper is also among the most recycled materials, owing to which the market for secondary copper has been posting considerable growth.
Critical component
ResearchAndMarkets.com said economic growth as a result of urbanisation and industrialisation is a leading factor driving the demand for copper.
Copper’s role in construction, manufacturing and infrastructure development makes it a critical component of progress.
The construction of commercial and residential buildings, bridges and the like all demand extensive utilisation of copper in diverse forms and applications.
Continued rapid growth in the electrical, electronics and telecommunications sectors owing to technological developments has further propelled the demand for copper.
Regional forecast
With an estimated share of about 41% in 2024, Asia-Pacific is the largest global market for copper and is also anticipated to exhibit the fastest growth over the analysis period, according to the report.
China has now overtaken the US as the leading auto-manufacturing country, with electric vehicles accounting for a significant share of this.
According to the World Economic Forum, Australia produces 4% of the international copper supply and is the sixth largest producer in the world, with copper weighing more than 0.9 million tonnes – or 17 Sydney Harbour Bridges – produced per year.