Citigroup predicts LME copper price to hit $10,000 before US tariffs

As the situation unfolds, stakeholders across the mining, manufacturing, and investment sectors will need to adapt to an evolving trade landscape that could significantly influence copper pricing trends worldwide.

Copper prices are projected to hit $10,000 per ton in London over the next three months, according to Citigroup Inc. The global copper market remains under pressure as uncertainty over U.S. import tariffs continues to loom.

Global copper market faces tight supply

Citigroup’s latest forecast signals a shift from its previous prediction in February, where the bank anticipated a drop to $8,500 per ton in the second quarter. However, the bank now expects copper prices to surge before experiencing a potential decline as U.S. trade policies take effect.

The market remains tight due to geopolitical and economic uncertainties, with investors closely monitoring tariff developments. Analysts believe that once the U.S. finalizes its tariff policies, demand fluctuations could lead to market corrections.

China’s copper industry struggles amid increased export licenses

In China, the world’s top copper producer, authorities have issued more export licenses as domestic smelters grapple with mounting losses. The intense competition for copper concentrate has pushed processing fees into negative territory, exacerbating financial strain on producers. This trend further underscores the fragility of the global copper market.

Impact of U.S. tariffs on copper prices

The recent implementation of Trump’s revamped Section 232 tariffs on steel and aluminum has already triggered retaliatory measures from the European Union and Canada. While former President Trump has expressed a desire to impose tariffs on copper, the U.S. Commerce Department must first conduct a formal investigation and present recommendations before any policy is enacted.

Citigroup analysts warn that copper prices could see a downturn once tariff-induced U.S. import demand weakens. "We expect a pullback in copper prices as the implementation of Section 232 tariffs on copper draws nearer," the bank stated.

Market outlook: volatility ahead

The coming months will be crucial for global copper markets as traders navigate uncertainties surrounding trade policies and supply constraints. Investors should brace for price fluctuations, with the potential for short-term spikes followed by corrections once tariff measures are clarified.

As the situation unfolds, stakeholders across the mining, manufacturing, and investment sectors will need to adapt to an evolving trade landscape that could significantly influence copper pricing trends worldwide.