Macquarie Near-Term Copper Outlook Stays Firm Despite Weak Physical Signals

Copper

Macquarie near-term copper outlook remains firm even as physical signals look softer. The bank raised its first-quarter copper forecast to $12,900/t and its second-quarter view to $12,500/t. It said speculative positioning and macro sentiment still dominate price action. As a result, Macquarie near-term copper outlook now points to continued volatility rather than a clean correction.

This view matters because physical fundamentals are not especially tight. Macquarie estimates the global copper market was in a 550,000-650,000t surplus in 2025. Visible inventories are also rising across major exchanges. Therefore, copper price volatility is being driven more by financial flows than by immediate supply stress.

The market backdrop reflects that disconnect clearly. LME copper rebounded toward $13,000/t after falling from a record above $14,500/t. The sell-off removed some excess positioning, but broad liquidation never followed. Consequently, Macquarie near-term copper outlook suggests dip-buying is still supporting prices.

Copper Price Volatility Is Overriding Loose Nearby Fundamentals

Copper price volatility is now the main story in the near-term market. Spot premiums in Europe and China are under pressure, while the forward curve has moved into contango. That usually signals weaker prompt tightness and better nearby availability. However, prices remain elevated because financial participation is still strong.

High outright prices are also affecting real demand. Fabricators and other end users have stayed cautious at these levels. Some consumers returned during the recent pullback, but buying remains selective. Therefore, the physical market still looks softer than headline copper prices suggest.

Macquarie does not expect a sustained price collapse without a major macro shock. The bank believes downside risks have eased after the recent correction. Meanwhile, longer-term support from electrification, grid investment, and energy transition spen

ding remains intact. As a result, LME copper surplus conditions may coexist with high prices for longer than many expected.

Lithium Price Outlook Also Turns More Bullish Near Term

Lithium price outlook also improved sharply in Macquarie’s latest update. The bank nearly doubled its near-term lithium forecasts, citing tighter early-2026 supply conditions. Strong energy storage demand and delayed new supply supported that change. Consequently, lithium now joins copper in showing stronger near-term pricing than earlier forecasts implied.

Macquarie still expects lithium tightness to ease later in the year as supply responds. That means the bank is not calling for an open-ended rally. However, it does believe current fundamentals justify a higher price floor in the near term. Therefore, lithium price outlook now looks firmer even if later conditions soften.

The broader message is important for metals markets. Copper and lithium are both trading in an environment where financial drivers remain powerful. Physical fundamentals still matter, but they are not the only force shaping prices. The market now has to price sentiment, positioning, and macro risk alongside real supply-demand balances.

The Metalnomist Commentary

Macquarie’s update reinforces a key market truth. Prices can stay high even when nearby physical signals weaken, as long as financial conviction remains strong. Copper and lithium both now sit in that uncomfortable zone where fundamentals matter, but timing is being set by money flow.