The price of %Copper could rise more than 75% by the end of 2025 as supply shortages and mining disruptions around the world take hold, according to a new report by research firm BMI.
Supply will struggle to keep up with rising demand for copper that’s being fueled by the transition to renewable energy sources, pushing prices higher in coming months, says BMI.
Additionally, interest rate cuts this year will weaken the U.S. dollar and make copper more attractive to foreign buyers, which will serve as an additional catalyst for the base metal.
Analysts at %Citibank (NYSE: C) are also bullish on copper prices in the year ahead, noting that plans to triple global renewable energy capacity by 2030 will benefit the commodity.
In a December report, Citibank forecast that higher renewable energy targets will boost copper demand by 4.2 million tons through 2030.
Citibank sees copper prices at $15,000 U.S. a ton in 2025, which would be 40% higher than the record $10,730 U.S. per ton price reached in March 2023.
Copper is viewed as a key ingredient in the energy transition as it is used to manufacture electric vehicles and wind turbines, among other products.
Other Wall Street analysts see copper prices getting a boost from mining disruptions, with investment bank %GoldmanSachs (NYSE: GS) forecasting a deficit of over half a million tons this year.
Last November, %FirstQuantumMinerals (TSX: FM) halted production at Cobre Panamá, one of the world’s largest copper mines, following nationwide protests over environmental issues.
At the same time, Anglo American (AAL), a leading copper producer, said it would cut its production levels in 2024 and 2025 as it moves to reduce costs.
The price of copper is currently trading at $8,462 U.S. per ton, down 21% from its all-time high reached last spring.
