Copper is charging toward the unprecedented threshold of US$12,000 per metric ton, capping a year of remarkable gains fueled by trade dynamics, constrained supply, and bullish long-term demand forecasts tied to the global energy transition.
Record Rally and Year-End Surge
With only a handful of trading days remaining in the year on the London Metal Exchange (LME), the industrial metal has soared by almost 40 per cent in 2025. This marks its most significant annual advance since 2009. On Monday, December 22, 2025, copper traded at US$11,923 a ton, up 0.3 per cent by 1:00 p.m. local time in London.
The immediate catalyst for the latest price spike is a rush of metal into the United States, as traders and consumers aim to get ahead of potential future import tariffs. This movement threatens to leave other global markets critically undersupplied. The year's broader rally has been powered by a combination of unplanned mine outages and soaring investor enthusiasm for copper's essential role in powering artificial intelligence infrastructure and the green energy shift.
Supply Stress Hits Smelters
A clear indicator of the intense pressure in the market emerged from difficult annual contract negotiations between miners and smelters. The talks resulted in a historic deal where smelters will receive zero dollars per ton for processing fees, the lowest rate ever recorded.
This squeeze on margins has already forced some copper smelters to shut down or significantly reduce production. Analysts warn that further operational outages could exacerbate strains on the supply of refined metal available on the LME and other major exchanges.
Bank Forecasts Point to Continued Strength
Major financial institutions are projecting the rally has further to run. Citigroup Inc. has forecast that prices could reach US$13,000 a ton by the second quarter of 2026, citing the ongoing scramble for metal destined for U.S. shores. Similarly, Goldman Sachs Group Inc. recently identified copper as its top pick among metals for the coming year.
While nickel also saw gains, rising 1.8 per cent on the LME Monday, other base metals were flat to lower, underscoring copper's unique position in the current market cycle. The metal's performance highlights a market where acute concerns over tightening global supply are outweighing broader economic slowdowns affecting demand.
