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Investing.com -- Copper prices are likely to come under pressure in the second half of 2025 due to a combination of tariff-related inventory unwinds and fading Chinese demand, according to Citi analysts.
In a new note, Citi said copper is facing “2H’25 demand and price headwinds from Section 232 and China solar frontloading payback.”
The bank forecasts prices falling to $8,800 per tonne over the next three months, citing the expected unwind of excess U.S. imports and a slowdown in China’s renewable energy-linked copper usage.
May data from Citi’s Global Copper End-Use Tracker (GCET) is said to have shown a sharp 16% year-over-year spike in copper consumption, driven by record solar installations in China ahead of a June regulatory change.
However, Citi cautioned this was “anomalous” and expects the solar boost to “disappear from June data onwards.”
“President Trump’s announcement of a planned 50% Section 232 tariff from 1st August should disincentivize incremental shipments of copper to the U.S.,” Citi said.
The bank estimates that around 500kt of excess copper imports will have arrived by the end of July, which “will be sufficient to negate U.S. copper import demand for the rest of 2025.”
Citi also warned that broader global manufacturing activity remains sluggish and that tariff headwinds should “weigh on moderately elevated copper positioning, along with ex-U.S. prices and spreads.”
Despite the near-term bearish view, Citi remains constructive over the medium term.
“We remain medium-term copper bulls,” the note said, citing expectations for “$10k/t average in 2026 and $11k/t in 2027,” supported by energy transition demand and a more constructive global growth outlook.