Copper had its best year since 2009, fueled by near-term supply tightness and bets that demand for the metal key in electrification will outpace production.
The red metal has notched a series of all-time highs in an end-of-year surge, rallying 42% on the London Metal Exchange this year. That makes it the best performer of the six industrial metals on the bourse. Prices dipped 1.1% Wednesday, the last trading day of 2025.
The latest gains also have been driven by traders rushing to ship copper to the US in anticipation of potential tariffs, creating tightness elsewhere. Trump’s plan to revisit the question of tariffs on primary copper in 2026 revived the arbitrage trade that rocked the market earlier in the year, tightening availability elsewhere even as underlying demand in key buyer China has softened. That price spread narrowed recently amid a power December rally on the LME.
“The expectation for future US import tariffs on refined copper has resulted in more than 650,000 tons of metal entering the country, creating tightness ex-US,” wrote Natalie Scott-Gray, senior metals analyst at StoneX Financial Ltd. She noted two-thirds of global visible stocks now are held within COMEX.
Beyond the tariff-driven flows, a deadly accident at the world’s second-largest copper mine in Indonesia, an underground flood in the Democratic Republic of Congo and a fatal rock blast at a mine in Chile have all added more strain to availability of the metal.
The near-term outlook for copper demand growth has been clouded by weakness in China, the world’s top consumer of the red metal. The country’s property market has been stuck in a yearslong downturn that’s dented the need for copper plumbing and wiring, while consumer spending has been sluggish, weighing on appetite for finished goods such as electronic appliances.
Still, robust momentum in global copper demand is expected over the long term. BloombergNEF estimates consumption could increase by more than a third by 2035 in its baseline scenario.
The drivers of this trend include the ongoing shift to cleaner energy sources such as solar panels and wind turbines, growing adoption of electric vehicles and the expansion of power grids.
Copper settled 1.1% lower at $12,558.50 a ton in London. Prices hit a record $12,960 on Monday.
This story was originally featured on Fortune.com
