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Copper had its best year since 2009, fueled by near-term supply tightening and bets that demand for the metal key to electrification will exceed production.
The red metal achieved a series all-time high at the end of the yearEXPLOSIONhas rallied 42% on the London Metal Exchange this year. That makes it the best performer among the six industrial metals on the bourse. Prices fell 1.1% Wednesday, the last trading day of 2025.
The latest gains were also driven by traders rushing to ship copper to the US in anticipation of potential tariffs, creating tension elsewhere. Trump plans to revisit the question of tariffs on primary copper in 2026revived the arbitrage tradewhich rocked the market earlier in the year, tightening availability elsewhere even as underlying demand from key buyers in China softened. That price spread narrowed recently amid a December power rally on the LME.
“Anticipation for future tariffs on US imports of refined copper has resulted in more than 650,000 tonnes of the metal entering the country, creating tension ex-US,” wrote Natalie Scott-Gray, senior metals analyst at StoneX Financial Ltd. He noted two-thirds of global visible stocks are now held within the COMEX.
Beyond the tariff-driven flows, a fatal accident at the world’s second-largest copper mine in Indonesia, an underground flood in the Democratic Republic of Congo and a deadly rock explosion at a mine in Chile have all added further strain to metal availability.
The near-term outlook for copper demand growth is overshadowed by weakness in China, the world’s leading consumer of the red metal. The country’s property market is stuck in a year-long slump that has hurt demand for copper pipes and cables, while consumer spending has slowed, weighing on appetite for finished goods such as electronic appliances.
However, strong momentum in global copper demand is expected in the long term. BloombergNEF estimates that consumption could increase by more than a third by 2035 in its baseline scenario.
The drivers of this trend include the continued shift to cleaner energy sources such as solar panels and wind turbines, increasing adoption of electric vehicles and the expansion of power grids.
Copper settled 1.1% lower at $12,558.50 a tonne in London. Prices hit a record high of $12,960 on Monday.
This story was originally featured on Fortune.com
