US Tariffs Pressure Copper Prices and Curb China’s Scrap Imports

China Copper

US tariffs, introduced by President Donald Trump on April 2, have significantly impacted global copper prices. The tariffs, set at a minimum 10% tax on all foreign imports, have caused concerns about weakened copper demand, particularly from key industries that rely on copper, such as automobiles and home appliances. China’s copper scrap imports are also under pressure due to retaliatory tariffs, which will be implemented by China on April 10.

Impact of Tariffs on Copper Prices

Following the announcement of tariffs, copper prices saw a dramatic decline. As of April 7, London Metal Exchange (LME) three-month copper prices fell to a one-year low of $8,105 per ton, a significant drop from $9,721 per ton on April 2. Similarly, Shanghai Futures Exchange (SHFE) prices also plummeted to a three-month low of 73,640 yuan per ton from 79,890 yuan per ton during the same period.

Although copper itself is not directly affected by the new tariffs, the downstream sectors, such as automotive manufacturing and home appliances, face substantial tariffs. This will likely depress demand for copper, as these industries represent significant end-users of copper products.

US Tariffs on Cars and Appliances Affect Copper Demand

A 25% tariff on imported cars and trucks came into effect on April 3, with a further 25% tax on auto parts set to follow in May. The US light vehicle market saw significant growth in 2024, with sales climbing to 16.8 million units. Similarly, the US imported $23.5 billion worth of home appliances from China in 2024. These appliances, including cooling devices and electronics, represented 23% of global copper demand in 2023. The imposition of tariffs on these goods will likely lead to a reduction in copper demand from the US.

On a positive note, lower copper prices may drive copper fabricators to restock in the short term, especially after a significant price drop in late March. Data from the SHFE shows that copper stocks fell from 256,328 tons on March 21 to 225,736 tons by April 3, as downstream buyers rushed to purchase copper cathode in response to falling prices.

China’s Retaliatory Tariffs and Copper Scrap Imports

China’s planned tariffs on US copper scrap, set to take effect on April 10, will impact copper supply in the country. In 2024, China imported over 440,000 tons of copper scrap from the US, accounting for nearly 20% of its total copper scrap imports. However, market participants predict that some traders will attempt to bypass the tariffs by sourcing US-origin copper scrap from other countries.

In February, US copper scrap exports fell by 10% compared to the previous year, with China seeing the largest drop in imports. This decrease in exports can be attributed to tariff expectations, which have made it difficult for US exporters to remain competitive. The large spread between CME and LME prices has further strained export options, leaving US dealers with excess scrap volumes.

Limited Impact on Copper Concentrate and Cathode Supplies

China’s retaliatory tariffs are expected to have a minimal impact on its domestic copper concentrate and cathode supply. In 2024, China imported just 460,000 tons of copper concentrate and 1,575 tons of copper cathode from the US, representing only a small fraction of its total imports. Therefore, the retaliatory tariffs are unlikely to cause significant disruptions to these supply chains.

Copper Prices Set to Rise Amid US Federal Reserve Rate Cut, but Short-Term Volatility Expected

The recent decision by the US Federal Reserve to cut interest rates is sparking predictions of higher copper prices, particularly from Chinese market participants. This optimism stems from expectations that a weaker US dollar will increase demand for copper, especially in the property sector. Historically, copper and the US dollar have an inverse relationship, as copper is priced in dollars, making it cheaper for buyers using other currencies.

On September 18th, the Federal Open Market Committee (FOMC) reduced the federal funds rate by 50 basis points, bringing it down to a range of 4.75-5%. This move marks the first interest rate cut since 2020, and policymakers have signaled that further reductions are likely before the end of 2024. Another 100 basis points of cuts are anticipated in 2025.

Chinese analysts believe this rate cut could encourage similar actions in China, particularly in the property market, potentially driving copper demand. "China is likely to follow the US to lower its borrowing costs especially on the property market, which may boost copper demand from the property market," an industrial analyst told Metalnomist. This development may further bolster copper prices in the medium term.

Copper prices remained relatively stable following the Fed's announcement, with only minor fluctuations recorded on both the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE). Three-month LME copper prices saw a slight drop of 0.2%, settling at $9,382.5 per ton, while SHFE’s most traded October copper contract rose by 0.43% to 74,760 yuan per ton.

Despite these indicators, not everyone shares the same optimism. Some market participants expect copper prices to soften in the short term, as the rate cut had been widely anticipated. “The market has already digested the interest rate cut and copper prices had risen this week,” a trader remarked to Metalnomist. A relatively high SHFE contract price, nearing 75,000 yuan per ton, may also put pressure on downstream producers.

On the supply side, copper inventories in China are declining as downstream producers restock for the Mid-Autumn Festival. The SHFE copper stocks fell from 241,745 tons on August 30th to 185,520 tons by mid-September. This stock drawdown is providing some bullish momentum for copper prices, although some analysts remain cautious about the sustainability of this trend.

Overall, while some analysts are bullish due to falling inventories and expectations of looser monetary policy in both the US and China, others remain skeptical about the near-term outlook for copper prices, citing the market’s earlier response to the expected rate cut.

Goldman Sachs Copper Price Outlook Cut as 2026 Surplus Forecast Widens

Goldman Sachs

Goldman Sachs copper price outlook has been lowered for 2026 as the bank expects weaker demand growth from the Middle East energy shock to outweigh stable supply assumptions. The bank now forecasts the global refined copper market will record a 490,000t surplus in 2026, up from its previous estimate of 380,000t.

Goldman Sachs copper price outlook for average 2026 copper prices was cut to $12,650/t from $12,850/t. The revision reflects a downgrade in expected global refined copper demand growth to 1.6% from 2%, based on the assumed effect of higher energy prices on world economic growth.

Goldman Sachs copper price outlook remains volatile in the near term because markets are still assessing the impact of the Iran conflict and potential disruption around the Strait of Hormuz. The bank expects prices to average $12,700/t in the second quarter under its base case, before drifting toward a medium-term fair value near $12,000/t later in 2026.

Energy Shock Weakens Near-Term Copper Demand

The main driver of Goldman’s downgrade is weaker macroeconomic demand rather than a change in mine or refined supply assumptions. The bank assumes the energy price shock will cut world real GDP growth by 0.4 percentage points, reducing copper demand growth accordingly.

Goldman estimates that a one percentage point slowdown in global real GDP growth typically reduces copper demand growth by around 0.9 percentage points. That relationship implies a larger inventory build and a softer price path than previously expected.

The bank expects ex-US copper balances to remain close to flat this year, but the global refined market is now expected to carry a larger surplus. This reinforces the near-term view that copper prices may face pressure if demand recovery slows or energy costs remain elevated.

Downside risk remains linked to the duration of disruption around the Strait of Hormuz. If energy flows do not recover from mid-April as assumed, higher fuel prices could further weaken industrial activity, manufacturing demand and copper consumption.

DRC Sulphur Risk Could Narrow the Surplus

Goldman has not included direct Middle East-related supply disruption in its base-case forecast. However, the conflict could still affect copper production in the Democratic Republic of Congo, where some solvent extraction-electrowinning output depends on sulphur moving through Middle East trade routes.

The DRC accounts for about 15% of global copper mine production. The country reportedly holds up to three months of sulphuric acid inventories, which means a short disruption may have limited impact on copper supply.

A longer interruption would be more significant. If sulphur exports through Hormuz remain constrained, acid availability could tighten, leaching costs could rise and DRC copper output could fall. That would narrow the projected refined copper surplus and provide some support to prices.

Goldman maintained its longer-term bullish copper view despite the 2026 downgrade. The bank still expects copper to rise to $15,000/t by 2035, supported by constrained supply growth and stronger demand from grid and energy infrastructure, which it sees accounting for 60% of global copper demand growth to 2030.

The Metalnomist Commentary

Goldman’s revision shows that copper’s near-term risk is shifting from supply shortage to demand sensitivity. However, the long-term copper story remains tied to grids, electrification and energy security, where structural demand still looks stronger than the 2026 surplus headline suggests.

China's Jiayuan to Secure Copper Cathode Supply from Swiss Firm IXM for Lithium-Ion Foil Production

Guangdong Jiayuan

Guangdong Jiayuan, a leading Chinese copper foil producer, has reached an agreement with Switzerland-based trading firm IXM to purchase a significant quantity of copper cathode feedstock. The deal, valued at approximately 5.066 billion yuan ($694 million), is set to support Jiayuan’s expansion of refined copper foil production, which is critical for lithium-ion batteries, copper-clad laminates, and printed circuit boards.

Details of the Copper Cathode Purchase Agreement

The agreement between Jiayuan and IXM will see the Chinese company secure 60,000 tons of copper cathode from IXM’s Geneva operations between December 2024 and November 2025. Additionally, Jiayuan will purchase 10,000 tons of cathode from IXM’s Shanghai branch during 2025. The price of the copper cathode will be determined through a negotiated pricing methodology, which will be finalized when both parties sign the contract.

Jiayuan, with a production capacity of 100,000 tons per year of refined copper foil, has seen steady growth in its production. In the first half of 2024, the company produced 24,000 tons of copper foil, marking a slight increase of 0.1% year-over-year. This agreement will ensure a steady supply of high-quality copper cathode to meet the growing demand for copper foil in key sectors such as electric vehicle (EV) batteries and electronic components.

China's Booming Copper Foil and NEV Industries

China’s refined copper foil production capacity reached 1.6 million tons per year in 2023, a 51% increase from the previous year. Notably, the production capacity for lithium-ion copper foil—used in batteries for electric vehicles—rose sharply by 68%, reaching 950,000 tons per year in 2023. With China’s new energy vehicle (NEV) market expanding rapidly, the demand for lithium-ion copper foil is expected to grow significantly. Industry experts predict that deliveries of lithium-ion copper foil in China will reach 1.1 million tons per year by 2025.

The Chinese NEV industry is experiencing robust growth, with production rising by 35% to 11.345 million units in the first 11 months of 2024. Sales of NEVs have also surged, increasing by 36% over the same period. As the NEV market continues to expand, the demand for copper, particularly copper foil for lithium-ion batteries, is expected to increase, further driving the need for stable copper supply agreements like the one between Jiayuan and IXM.

Copper Market Trends and Prices

On December 12, 2024, Metalnomist-assessed grade-A copper cathode prices, based on the London Metal Exchange (LME) official cash prices, were in the range of $40-60 per ton cif Shanghai. These prices remained flat compared to December 10, but they had dropped from the previous range of $45-60 per ton observed on December 5 due to a rebound in copper prices during the week. The fluctuating prices highlight the importance of securing stable supply contracts for manufacturers like Jiayuan as copper remains a critical commodity in the transition to a low-carbon economy.

Copper prices soften as inventories rise and demand slows

Copper

Copper prices soften as inventories rise across major exchanges in March. LME three-month copper settled at $12,609/t on 18 March. Prices now cap below $13,000/t after peaking above $14,500/t in late January.

Rising LME stocks drive the clearest near-term bearish signal. On-warrant tonnage reached 290,475t on 18 March, up from about 110,550t in early January. Total LME copper stood at 334,100t, while cancelled warrants fell to 13.06%. That shift shows metal enters warehouses faster than buyers remove it.

A deeper contango confirms softer physical urgency. Cash-to-three-month spreads widened through March as nearby supply looked ample. Meanwhile, SHFE deliverable stocks hit 433,458t by 13 March, an all-time record. Falling SHFE prices reinforce weak Chinese buying at elevated levels.

Inventories rise as contango signals easier nearby supply

Copper prices soften as inventories rise, and macro worries now dominate. The US-Israel war with Iran lifted oil prices and strengthened the dollar. Therefore, traders discount construction and manufacturing demand for industrial metals. Copper acts as a growth gauge, so risk-off flows pressure prices.

Macro headwinds cool demand as the bull case shifts to later years

Supply conditions also look less supportive than in 2025. Analysts see incremental mine output returning as buyers resist high offers. As a result, sellers struggle to place cargoes without sharper discounts. However, Middle East copper consumption stays below 5% of global demand growth.

Medium-term risks still keep the structural bull case alive. A prolonged Hormuz disruption could tighten sulphur and sulphuric acid flows. About one-fifth of global copper relies on leaching and SX-EW routes. Therefore, a severe acid shortage could eventually cut African Copperbelt output. For now, visible surplus metal keeps rallies capped.

The Metalnomist Commentary

Inventory tells the truth in this phase. If stocks keep rising, prices will need demand to reappear. When contango deepens, producers and traders should prepare for tougher term negotiations.

Copper Prices Plunge Amid Rising Inventories and Global Recession Fears

Copper prices have plummeted to a two-month low as rising global stockpiles and fears of an impending economic recession weigh heavily on the market. The London Metal Exchange (LME) three-month copper prices dropped to $8,714 per metric tonne on August 5, a significant decline from the record high of $11,104.50 per metric tonne reached on May 20. Similarly, the most traded September contracts on the Shanghai Futures Exchange closed at 71,390 yuan per tonne ($9,934/t) on August 7, down from a historical high of 88,940 yuan per tonne on May 20.

The decline in copper prices has been driven by a surge in global exchange copper stocks, which soared to a three-year high of 556,033 metric tonnes on August 2, up from 215,269 metric tonnes in December 2023. This increase is largely attributed to rapid output growth and subdued demand from China, the world’s largest consumer of copper.

Global refined copper production saw a 6% year-on-year increase from January to May, fueled by capacity expansions in China and the Democratic Republic of the Congo (DRC). Chinese smelters alone added approximately 800,000 tonnes per year of new capacity, primarily in the second half of 2023. CMOC, a diversified metals and minerals producer, reported a doubling of copper production from its DRC operations to 313,400 tonnes during the first half of 2024.

Further production increases are anticipated as new projects come online in the latter half of the year. US-based mining giant Freeport McMoran recently completed the construction of its Manyar smelter in Indonesia, with a production capacity of 300,000 tonnes per year, set to begin copper cathode manufacturing soon. Additionally, Indonesia’s Amman Mineral Nusa Tenggara and China’s Jinchuan Group are expected to add significant capacity in the coming months.

Despite the surge in output, copper demand growth has lagged, particularly in China. Demand is projected to increase by only 2-3% this year, hindered by a 21.8% decline in the completion of new housing projects during the first half of the year. The power grid sector, China’s second-largest consumer of copper, has also seen moderate demand growth, with investments shifting toward aluminum-intensive ultra-high voltage grids.

Emerging sectors such as new energy vehicles and solar photovoltaics have seen steady copper demand growth, but not enough to offset the slowdown in the real estate and power grid sectors. Market participants remain cautious about the overall outlook.

Macroeconomic concerns have further exacerbated the situation. Weaker-than-expected US employment data for July, coupled with declining manufacturing indices in both the US and China, have fueled fears of a global recession. The US Federal Reserve’s emergency meeting on August 5, following a collapse in Japan’s stock market, has added to the uncertainty.

However, some positive factors may support copper prices in the near term. A continued shortage of copper concentrate feedstock and the suspension of several Chinese secondary copper processors due to a tax rebate cancellation may lead to production cuts. Additionally, a strike at BHP’s Escondida copper mine in Chile could further tighten supply.

The rapid development of the artificial intelligence (AI) industry in the US is expected to drive copper demand in the grid system, particularly in states like Virginia, where commercial electricity demand has surged due to the growth of AI databases.

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.

Grasberg Copper Disruption Cuts Freeport Output but Supports 2026 Recovery Story

Grasberg copper mining

Grasberg copper disruption drove a steep decline in Freeport copper output in 2025. The company produced 3.38bn lb of refined copper. That was down from 4.21bn lb in 2024. As a result, Indonesia copper production became the main drag on group performance.

However, higher metal prices protected earnings despite weaker copper volumes. Freeport realised an average copper price of $4.75/lb in 2025. That was above $4.21/lb a year earlier. Meanwhile, Freeport molybdenum production also rose and added further support.

Indonesia Copper Production Became Freeport’s Main Weak Spot

Indonesia copper production fell sharply after the September suspension at Grasberg Block Cave. Freeport’s Indonesian copper output dropped to 1.02bn lb in 2025. That compared with 1.8bn lb in 2024. Therefore, Grasberg copper disruption reshaped the company’s regional balance.

Fourth-quarter performance showed the full impact of the disruption. Copper production fell by 62pc year on year to 640mn lb. Sales still beat internal guidance because inventories in Indonesia declined faster than expected. However, quarterly sales remained far below late-2024 levels.

Regional trends outside Indonesia looked mixed rather than weak. US copper operations improved on better ore grades and leaching activity. South American production declined because of lower grades and lower throughput. As a result, Freeport copper output depended heavily on the lost Indonesian volumes.

Freeport Molybdenum Production and Higher Prices Supported Profitability

Freeport molybdenum production helped offset the copper shock in 2025. Molybdenum output rose to 92mn lb from 80mn lb. Sales also increased to 83mn lb from 78mn lb. Consequently, by-product strength softened the earnings impact from copper losses.

Higher realised prices also improved Freeport’s financial resilience. Fourth-quarter realised copper prices climbed to $5.33/lb from $4.15/lb a year earlier. Molybdenum prices also moved higher. Therefore, stronger pricing helped the company post better profitability despite lower output.

Freeport’s fourth-quarter net income rose to $406mn from $274mn a year earlier. Unit cash costs increased in the fourth quarter because Grasberg volumes fell. Still, costs remained below earlier company estimates. That result showed disciplined cost control under difficult operating conditions.

Freeport now expects a phased Grasberg restart from the second quarter of 2026. It aims to restore about 85pc of normal production in the second half. Consolidated copper sales are forecast at around 3.4bn lb in 2026. Therefore, the market will watch execution in Indonesia very closely.

The Metalnomist Commentary

Freeport’s 2025 results show how one major asset can still dominate global copper narratives. Grasberg copper disruption hurt volumes, but price strength and molybdenum kept margins alive. If the 2026 restart stays on track, Freeport could re-enter the market with much stronger operating leverage.

LME copper prices to ease to $9,100/t in 3Q: JPMorgan

JPMorgan

LME copper prices to ease to $9,100/t in 3Q, says JPMorgan. The bank cites a US destocking cycle and softer China demand. As a result, near-term pricing faces headwinds despite tightness earlier this year.

Why LME copper prices to ease to $9,100/t in 3Q

JPMorgan expects LME copper prices to ease to $9,100/t in 3Q. The bank says US buyers will unwind first-half inventory hoarding. Meanwhile, confirmation of 50% US tariffs reduces front-loading incentives. Copper should divert from the US and replenish LME stocks. Therefore, spreads may loosen and pressure prices.

Risks that could shift the price path

JPMorgan outlines a mild recovery after 3Q. It sees $9,350/t in 4Q, $9,400/t in 1Q, and $9,500/t in 2Q. However, several factors could skew outcomes. A copper scrap export ban or US substitution could move demand. A delay or change to US tariffs could alter flows. Geopolitical shocks in the Middle East remain another wildcard.

US dynamics drove the first-half dislocation. Uncertainty on tariffs sent disproportionate refined imports to the US. May US copper imports rose 129% year on year. China also pulled strongly, with apparent demand up about 10% through May. But JPMorgan sees China softening in 3Q. Housing weakness, slower white goods, and fewer solar installs weigh on consumption.

Arbitrage will likely widen in the coming months. JPMorgan expects CME prices to gain against LME. The LME-CME arb could move toward a 50% premium. This shift reflects tighter US premia during destocking and softer LME benchmarks. Market participants should watch inventories and spreads closely.

The Metalnomist Commentary

For producers, 3Q looks tactically weak but not structurally bearish. Destocking and softer China mask longer-term supply risks. Watch LME inventories, Chinese construction signals, and US tariff execution to gauge the next leg.

Grasberg Copper Mine Recovery Delay Tightens Indonesia Supply Outlook

Grasberg Copper Mine

Grasberg copper mine recovery has been delayed after Freeport-McMoRan reported slower progress at its Indonesian operation following last year’s fatal mud rush accident. The company now expects the Grasberg Block Cave to recover more gradually than previously planned.

The Grasberg copper mine recovery delay is important because Grasberg is one of the world’s largest copper assets. Any slower restart affects global mine supply at a time when copper demand remains tied to grids, data centres, electrification and industrial policy.

The Grasberg copper mine recovery outlook has been cut because wet drawpoints increased inside the mine after the incident and subsequent suspension of mining activity. Freeport said it must upgrade ore loading infrastructure before production can recover more fully.

Freeport now expects Grasberg to reach only 65% of production capacity by the second half of this year. It previously expected the mine to reach 85% in that period.

Grasberg Restart Slows After Underground Infrastructure Issues

The progressive restart of Grasberg Block Cave has been slower than expected. The increase in wet drawpoints has limited mining activity and created a need for infrastructure upgrades.

Freeport now expects Grasberg to reach about 85% of capacity by mid-2027. The company expects the mine to approach full capacity by the end of 2027.

That marks a clear delay from the previous plan. Freeport had earlier expected Grasberg to return to full production capacity by the end of 2027.

The production impact was visible in the first quarter. Freeport’s Indonesian copper output fell by 68% on the year to 95mn lbs because of the Grasberg disruption.

Across Freeport’s global operations, copper output fell by 24% on the year to 662mn lbs. The decline shows how heavily the company’s production profile depends on a stable Grasberg recovery.

US operations partly offset the Indonesian weakness. Copper production from Freeport’s seven mines in the southwest US rose by 3% on the year to 309mn lbs.

Output from the company’s mines in Peru and Chile fell by 4.8% to 258mn lbs. Lower leach placements weighed on production across those assets.

Higher Copper Prices Offset Lower Production

Freeport’s first-quarter financial results were supported by stronger copper prices. Average copper prices rose by 30.1% on the year to $5.78/lb.

Unit production costs also improved. Freeport’s per-unit costs fell by 7.7% to $1.91/lb.

This helped offset lower production and sales volumes. Copper sales volumes fell by 25% from a year earlier, although they were 3% above Freeport’s January estimate.

Freeport’s profit more than doubled to $881mn in the first quarter. Revenue rose by 8.8% to $6.2bn.

The result shows the current copper market tension. Operational supply is weaker, but higher prices are protecting margins for major producers.

Molybdenum performance was mixed. Consolidated molybdenum production fell by 4% to 22mn lbs, while sales volumes rose by 20% to 24mn lbs.

For the copper market, the delayed Grasberg recovery adds another supply-side risk. Indonesia has been expected to support global copper growth, but mine-level disruptions continue to limit output.

The issue also reinforces a broader industry problem. Large underground copper mines can take years to stabilise after major incidents, and infrastructure bottlenecks can delay recovery even when restart work has begun.

The Metalnomist Commentary

The Grasberg delay shows why copper supply cannot be judged only by long-term resource size. A single underground disruption at a world-class mine can reshape near-term supply and strengthen copper’s strategic premium.

Lithium-Ion Battery Copper Foil Shipments Surge as Ultra-Thin Products Gain Share

Copper Foil

Lithium-ion battery copper foil shipments rose sharply in 2025 as global battery production expanded and manufacturers shifted toward thinner materials to reduce copper costs. Global shipments reached 1.302mn t, up 41.7% from 2024, according to Chinese research institute EV Tank.

Lithium-ion battery copper foil demand remains closely tied to electric vehicle and energy storage growth. Copper foil is a key current collector in lithium-ion batteries, making it essential to cell performance, energy density and manufacturing cost.

Lithium-ion battery copper foil shipments were dominated by China, which accounted for 82.9% of global deliveries in 2025. EV Tank expects global shipments to reach 2.615mn t by 2030, implying continued expansion as battery output scales.

The product mix changed quickly during the year. The share of 8μm foil declined, while 6μm remained the mainstream product and accounted for more than 70% of total shipments.

Ultra-Thin Foil Gains Momentum on Copper Cost Pressure

Ultra-thin copper foil gained share as battery producers looked for ways to reduce copper input costs. Persistently high global copper prices pushed cell manufacturers to use thinner foil while maintaining battery performance.

The combined share of 5μm and 4.5μm ultra-thin foil rose to 24% in 2025. This is a major shift for a material category that requires tighter production control, better surface quality and stronger consistency.

Thinner copper foil can help reduce battery weight and improve energy density. It also lowers the amount of copper used per cell, which becomes increasingly important when copper prices remain elevated.

EV Tank expects 5μm and thinner foil to become a key material for high-end batteries. This reflects the industry’s move toward lighter, higher-energy-density cell designs.

However, thinner foil also raises manufacturing difficulty. Producers must control pinholes, tensile strength, elongation, surface roughness and coating compatibility more precisely.

That technical barrier could separate higher-end suppliers from lower-cost producers. As battery customers shift toward thinner grades, qualification and process reliability will become more important than simple capacity.

China Leads Supply as Competition Intensifies

China’s 82.9% share of global shipments shows its dominant role in battery copper foil supply. The country has built large-scale capacity around its lithium-ion battery ecosystem, supported by domestic EV, energy storage and cell manufacturing growth.

Competition intensified in 2025 as the market recovered and producers brought earlier-built capacity on line. This created a more fluid ranking among suppliers.

Longdian Wason ranked first with a 12.2% market share. Huachuang New Material followed after capacity ramp-ups lifted output and sales.

Defu Technology and Jiayuan Technology ranked third and fourth, respectively. Seven companies in the top 10 changed positions during the year, showing how quickly capacity, customer access and product mix are reshaping the sector.

Battery makers also increased procurement from second-tier suppliers to improve supply stability. This suggests buyers are trying to diversify supplier bases rather than rely only on leading producers.

For copper markets, the trend is strategically important. Battery copper foil growth creates a direct link between copper demand and battery technology. But the move toward ultra-thin foil also means battery growth will not translate into copper demand on a simple one-to-one basis.

The sector is therefore entering a more technical phase. Volume growth remains strong, but material intensity, foil thickness, supplier qualification and copper price pressure will all shape future demand.

The Metalnomist Commentary

The copper foil market shows how battery growth can lift copper demand while also forcing material thrift. High copper prices are pushing battery makers toward thinner foil, making technology and process control as important as raw capacity.

EQ copper premiums set to climb in 2026 as China embraces DRC supply

Copper

EQ copper premiums are poised to rise in 2026 as China deepens its adoption of equivalent-quality cathodes sourced from the DRC. Market participants expect EQ copper premiums to move sharply higher from today’s levels, reflecting tighter discounts in the DRC and shifting global trade flows. As a result, EQ copper premiums are becoming a critical signal for Chinese fabricators and global copper traders alike.

EQ copper premiums linked to DRC discounts and shifting trade flows

EQ copper premiums today sit around $30–35/t cif Shanghai, but traders already flag upside for 2026. This year’s term deals for EQ copper premiums were agreed at just $5–10/t, so a move toward $30/t would mark a structural reset. The key driver is cost escalation in the DRC, where discounts to LME prices have narrowed as local prices firm.

Meanwhile, rapid production growth in the DRC has transformed EQ copper’s role in China’s import mix. EQ copper cathode, largely DRC-origin, now accounts for more than a third of China’s cathode imports, up from about 10pc in 2020. At the same time, Chilean cathode has been diverted toward the US, amid tariff speculation, with China’s imports from Chile falling by 45pc year on year in January–August 2025. Therefore EQ copper premiums increasingly reflect both DRC mine economics and changing global copper trade patterns.

EQ copper premiums narrow the gap to exchange-listed cathode

The premium spread between exchange-registered cathodes and EQ copper premiums has narrowed to roughly $30/t this month. Previously, the spread hovered around $50/t in the second quarter, when Chinese buyers still favoured exchange-listed cathodes. However, rising flat prices and tighter LME–SHFE arbitrage have pushed many fabricators toward EQ material.

Chinese cable makers and fabricators now treat EQ cathode as a mainstream choice, thanks to reliable quality and lower all-in costs. As a result, EQ copper premiums are no longer a marginal discount indicator but a core benchmark in the Chinese physical market. At the same time, SuperMetalPrice launch of a dedicated EQ copper import premium assessment formalises this shift and gives traders a clearer pricing reference tied to the LME cash price.

EQ copper premiums sit within a wider zinc and copper premium realignment

EQ copper premiums are rising against a backdrop of broader base metal premium recalibration. Domestic Grade-A copper premiums in China, referenced to SHFE front-month, remain in a modest band from a slight discount to a small premium. Import arbitrage has improved, with the newly assessed copper cathode arbitrage at -Yn280/t, up from deeper negative levels earlier in September, which supports seaborne interest.

At the same time, zinc and other base metal premiums remain capped by weak downstream demand, even as LME stock draws offer support. This creates an unusual environment where EQ copper premiums strengthen on supply and trade-flow dynamics, while broader consumption indicators stay soft. For global traders, EQ copper premiums now sit at the intersection of DRC mine supply, Chinese import arbitrage, and evolving risk pricing around non-exchange material.

The Metalnomist Commentary

EQ copper premiums are emerging as a strategic barometer for China’s copper supply security and DRC exposure. If 2026 term negotiations lock in markedly higher EQ copper premiums, that will confirm EQ cathode’s shift from discount alternative to benchmark feedstock. Watch how Chile–US trade flows and DRC discount behaviour evolve, because both will dictate whether EQ copper premiums continue to climb beyond the $30/t threshold.

Copper Supply Chain Fragility Is Underpriced Despite Price Rally

Ivanhoe

Copper supply chain risk is still being underpriced even after London Metal Exchange prices rallied above $13,000/t, according to Ivanhoe Mines chairman Robert Friedland. He warned that higher prices alone will not quickly unlock new mine investment or solve the operational bottlenecks now shaping copper supply.

The copper supply chain is facing a more complex problem than headline market balances suggest. Friedland pointed to sulphur, sulphuric acid, diesel and other critical inputs as increasingly important constraints for mining operations, especially in Africa.

The copper supply chain is particularly exposed in the Democratic Republic of Congo, where a large share of production depends on acid leaching. If sulphuric acid availability tightens further, Friedland said about half of the DRC’s low-grade leached copper could be at risk unless higher copper prices offset sharply higher acid costs.

This warning comes as the Middle East conflict affects copper markets indirectly. The immediate threat is not concentrate supply, but sulphur-linked cost inflation that can raise operating costs for solvent extraction and leaching operations.

Sulphuric Acid and Diesel Risks Expose Mining Cost Vulnerability

Sulphuric acid has become a central issue for copper supply because much of the DRC’s production relies on acid leaching. A prolonged disruption in sulphur flows could affect roughly 3mn t/yr of DRC copper output, making the country one of the most exposed parts of the global copper market.

The DRC’s vulnerability is different from that of traditional concentrate producers. Concentrate supply depends on mining, milling, logistics and smelter demand. Leached copper also depends on steady sulphur or sulphuric acid access, which creates another layer of supply-chain risk.

Ivanhoe’s Kamoa-Kakula complex is unusually positioned because it produces sulphuric acid as a by-product rather than relying only on external supply. The operation produced more than 100,000t of sulphuric acid in the first quarter of 2026, with annual output expected to reach 600,000-700,000 t/yr once the new smelter is fully ramped up.

That acid production gives Ivanhoe a strategic advantage. It can reduce exposure to imported acid costs while supporting copper output in a market where other DRC producers may face tighter reagent availability.

Diesel is another operational risk. Remote mines depend on diesel for haulage, power generation and logistics, especially where grid access is weak or transport routes are long.

Friedland said highly exposed mining firms should consider securing up to a year of diesel supply. He also argued that the DRC may be less vulnerable than some expect because refined products can arrive through India, Nigeria and southern Africa.

Still, the full operational impact may not yet be visible. Supply-chain shocks often appear first through higher costs, longer lead times and working-capital pressure before they become production losses.

This is why the copper market may be misreading risk. Visible inventories and annual balances can suggest moderate surplus, while the physical supply chain becomes more fragile beneath the surface.

A copper price above $13,000/t helps margins, but it does not immediately create acid, diesel, spare parts, qualified labour or new mine capacity. Mine investment still depends on permitting, capital cost, political risk and long development timelines.

AI, Data Centres and Critical Metals Raise Copper’s Strategic Value

Friedland linked copper’s long-term importance directly to electrification, cooling systems, data centres and artificial intelligence. These sectors are turning copper from a conventional industrial metal into a strategic infrastructure material.

AI data centres need large amounts of power infrastructure. That means more copper for grids, substations, transformers, cooling systems, cabling, backup power and electrical distribution.

The growth of AI also reinforces demand for metals beyond copper. Friedland highlighted gallium, scandium, dysprosium, rhenium and tantalum as thinly traded materials with low liquidity but high industrial dependence.

This is an important market signal. The next phase of industrial competition will not depend only on bulk metals. It will also depend on access to small-volume strategic materials that support semiconductors, aerospace, defence, magnets and high-performance alloys.

Copper remains the anchor metal because it connects electrification, grid expansion, industrial automation and data infrastructure. Friedland described copper as the “king of metals” because no large-scale energy transition can move without it.

However, copper’s strategic value also exposes the market to policy pressure. The US is beginning to understand mining’s national security role more clearly, especially as domestic supply concentration and import dependence become more visible.

Market participants expect moderate global copper surpluses this year, helped by last year’s supply windfall. But US physical balances are expected to remain tight, with the CME-LME arbitrage reopening to encourage flows into the country.

That regional tightness matters. Copper may look balanced globally, while specific markets face procurement pressure because of tariffs, logistics, exchange spreads, domestic manufacturing needs or strategic stockpiling.

The broader lesson is that copper pricing must account for supply-chain resilience, not only mine output. A mine that lacks acid, fuel or logistics capacity cannot deliver metal reliably, even if ore is available.

For investors, this strengthens the value of hard assets with low obsolescence. Mines, smelters, acid plants, power infrastructure and logistics corridors are becoming more valuable as supply chains become less predictable.

For manufacturers, copper procurement is becoming a strategic function. Buyers linked to grids, data centres, defence, cooling systems and energy infrastructure will need more secure supply agreements, not only exposure to exchange prices.

The Metalnomist Commentary

Friedland’s warning cuts through the headline copper rally: the market is pricing metal, but not enough supply-chain fragility. Copper’s next constraint may come less from ore availability and more from acid, diesel, logistics and the minor metals needed to build the electrified economy.

UK recycler CF Booth enters administration as copper prices squeeze working capital

CF Booth

UK recycler CF Booth enters administration after financial pressure intensified across copper inventory financing and compliance costs. UK recycler CF Booth enters administration as higher copper prices raised the cash tied up in scrap and finished stock. Therefore, the company could not secure a solvent outcome despite exploring sale and reinvestment options.

UK recycler CF Booth enters administration with operations halted at its main Rotherham facility. Administrators retained a reduced team to manage statutory requirements. Meanwhile, the closure removed an established processing outlet for mixed and lower-quality copper scrap in the UK market.

Why high copper prices can hurt recyclers as much as they help

High copper prices can strain recyclers through working capital, not just margin. Scrap yards must fund more expensive inbound units before selling processed material. As a result, liquidity tightens quickly when lenders, insurers, or counterparties become cautious.

Energy costs and compliance costs can compound that pressure in Europe. Environmental obligations, VAT complexity, and health and safety enforcement raise fixed costs. However, higher costs rarely pass through cleanly when downstream buyers resist payables.

What CF Booth’s shutdown could mean for European copper scrap flows

CF Booth’s absence may tighten supply channels for lower-grade copper scrap over time. Traders expect the impact to show first in mixed grades and domestic availability. Therefore, regional scrap blending and sorting networks may need to reroute volumes to alternative processors.

Pricing has not reacted sharply yet because demand remains soft and supply looks ample after year-end destocking. However, payables could firm later in the quarter if demand improves and processing capacity stays offline. Meanwhile, the situation highlights broader stress for mid-sized recyclers exposed to price volatility and rising operating costs.

The Metalnomist Commentary

This case shows how copper rallies can break recyclers through financing, not fundamentals. However, the market impact depends on whether new owners restart capacity quickly. Operators with strong credit lines and low-cost power will keep gaining share.

China Copper Scrap Cash Spreads Widen Amid Price Fluctuations

China Copper Scrap

Cash spreads for Chinese copper scrap imports have increased from last week due to lower copper prices on major exchanges.  Scrap sellers maintained firm offers as LME copper prices fell to a four-month low of $8,757/tonne on December 31st.

Import Arbitrage Loss and Tariff Exemptions

China's copper scrap import arbitrage loss widened to -1,000 yuan/tonne ($137/tonne) this week, compared to a small profit in late December. This widening loss is attributed to lower domestic spot copper metal prices relative to LME prices, resulting in limited trading activity.  Despite this, China will expand its import duty exemptions on more recycled copper feedstocks in 2025. The government has broadened the products included under HS code 74040000 to "recycled copper and alloy feedstock" for 2025, from "recycled brass copper feedstock and recycled copper feedstock" in 2024. The import duty for this HS code remains at zero for both years.  However, market participants remain cautious about importing copper scrap from the US, even with the expanded tariff exemptions in 2025.

Market Outlook and Price Rebound

LME three-month copper prices have since rebounded, rising from a close of $8,781.50/tonne on December 31st to a close of $8,980/tonne on January 7th.  Positive investor sentiment has been fueled by the People's Bank of China announcement of increased financial support for technology innovation and consumption, along with measures to enhance liquidity, safeguard capital markets, and potential reductions in interest rates and the reserve requirement ratio for banks.

Tight Copper and Aluminium Supply Keeps Metals Outlook Firm Into 2026

ING

Tight copper and aluminium supply is shaping the metals outlook into 2026. ING expects both markets to stay well supported. Copper remains constrained by mine underperformance and disrupted trade flows. Meanwhile, aluminium faces limited supply growth and rising competition for power.

Copper market tightness has extended from 2025 into 2026. ING said operational disruptions and weak mine performance continue to limit supply. Environmental rules, land-use restrictions, and permitting delays add further pressure. As a result, the market still lacks enough new metal outside the United States.

US trade policy is also distorting physical flows. Uncertainty over refined copper tariffs has pulled metal into the US market. ING said this has effectively turned US inventories into a strategic reserve. Therefore, regions outside the US remain tighter than headline stock data suggests.

Copper Market Tightness Still Depends on Supply Constraints and China Demand

Copper market tightness is not being solved by high prices. ING said most spending supports delayed projects or offsets declining ore grades. Very little capital is moving into major greenfield developments. Consequently, current prices cannot fix near-term supply deficits.

Long-term copper demand still looks strong. Grid investment, renewable energy expansion, electrification, and data centre growth support multi-year consumption. However, ING sees China as the main downside risk. Without stronger Chinese buying, copper prices could face sharper corrections.

This imbalance is also driving dealmaking across the mining sector. High prices are encouraging mergers and acquisitions rather than greenfield investment. Producers and investors want near-term output, not distant optionality. Therefore, existing assets now look more strategic than undeveloped projects.

Aluminium Market Deficit Could Deepen as Power Competition Intensifies

Aluminium is also moving toward a tighter structural balance. ING expects a clear aluminium market deficit in 2026. Supply growth outside Indonesia remains limited, while China has kept capacity additions disciplined. As a result, the market may tighten further even without a demand surge.

Energy costs remain the biggest constraint for aluminium supply. High power prices still block meaningful smelter restarts in Europe and the United States. ING also highlighted growing competition from AI-driven data centres. Those facilities can outbid aluminium smelters for long-term electricity contracts.

Demand, however, remains resilient across key end markets. Packaging, transport, construction, and renewable energy continue to support aluminium consumption. Copper substitution in wiring and cables is adding further upside. Therefore, aluminium prices could keep rising if supply stays constrained.

The Metalnomist Commentary

Copper and aluminium now share the same deeper problem. High prices are not producing enough fast supply. That makes policy, power access, and project timing more important than headline demand alone.

Taseko Florence Copper Project Starts Cathode Ramp-Up in Arizona

Taseko

Taseko Florence copper project has started producing copper cathode in Arizona, giving Canadian producer Taseko Mines its first commercial metal from the US in-situ copper development. The project’s solvent extraction and electrowinning plant started operations in mid-February and produced 1.5mn lb, or about 680t, of copper cathode in the first quarter.

The Taseko Florence copper project is important because it uses in-situ copper recovery rather than conventional open-pit mining. The process leaches copper underground and recovers it through solution flows before producing cathode through solvent extraction and electrowinning.

The Taseko Florence copper project offers a different supply model for the US copper market. It can reduce upfront capital intensity compared with traditional mining, but it depends on careful control of underground leaching, solution movement, grades and environmental performance.

Taseko previously targeted 40mn-50mn lb of copper output from Florence in 2026. The company expects production to rise to 80mn lb in 2027 as the project moves through ramp-up.

Florence Adds US Cathode Capacity With Lower Mining Intensity

Florence’s first cathode production marks a key operational step for Taseko. The project is now moving from construction and commissioning into the early stage of commercial production.

The in-situ recovery model gives Florence strategic relevance. It avoids large-scale excavation and instead relies on controlled leaching below ground, which can reduce surface disturbance and capital needs.

However, the method also requires disciplined technical execution. Operators must manage solution chemistry, wellfield performance, recovery rates and environmental controls to ensure the process remains stable.

Florence’s output will come as refined copper demand becomes increasingly tied to electrification, grid investment, data centres, electric vehicles and domestic manufacturing. US cathode supply is strategically important because refined copper availability affects wire, cable, power equipment and industrial users.

The project’s cost exposure also looks partly protected in the near term. Taseko said Florence will not face the sharp recent rise in sulphuric acid prices because its acid supply is locked under a fixed-price contract for this year.

That protection matters. Sulphuric acid has become a more sensitive cost input for copper leaching operations because Middle East disruption and tighter sulphur flows have lifted market concerns. A fixed-price contract gives Florence more cost visibility during its early ramp-up.

Gibraltar Output Jumps as Diesel Costs Add Pressure

Taseko’s established Gibraltar mine in British Columbia also delivered a stronger first quarter. Copper output rose to 30mn lb, or about 13,600t, up 50% from a year earlier.

The increase was supported by steadier grades and better recoveries. This suggests Gibraltar benefited from improved operating performance rather than only stronger throughput.

Molybdenum output also rose sharply. Gibraltar produced 717,000 lb, or about 325t, of molybdenum in the first quarter, up 113% from a year earlier.

Molybdenum by-product output can improve mine economics because it adds revenue beyond copper. It also links Gibraltar to special steel, stainless steel, energy equipment and high-strength alloy demand.

Sales lagged production slightly because of shipping timing. This means some of the production benefit may flow through later, depending on shipment schedules and realized prices.

Cost pressure remains a risk. Taseko said higher diesel prices could add 10-15¢/lb to Gibraltar costs this year, equivalent to about $220-330/t.

Diesel exposure is important for open-pit mines because haulage, mobile equipment and site logistics rely heavily on fuel. If energy prices remain elevated, Gibraltar’s operating costs could rise even as production performance improves.

Taseko’s first-quarter update therefore shows two different copper stories. Florence is entering ramp-up as a new US cathode asset with fixed acid pricing, while Gibraltar is producing more copper and molybdenum but faces higher fuel-cost risk.

The Metalnomist Commentary

Taseko’s update shows how copper supply growth is increasingly tied to project type and cost exposure. Florence offers a lower-mining-intensity US cathode route, while Gibraltar highlights the continuing importance of grade, recovery and diesel costs in conventional copper mining.

Copper as a Macro Hedge Is Rewriting the Market Narrative

Copper

Copper as a macro hedge is changing how the market behaves in 2026. Sucden argues that copper now trades less like a pure industrial metal. It increasingly moves with positioning, tariffs, and broader macro sentiment. As a result, copper as a macro hedge is driving sharper and less linear price action.

The shift is visible in the latest rally. Three-month LME copper briefly moved above $14,000/t before easing back slightly. The move came during Asian trading and reflected heavy speculative buying. Therefore, copper price volatility is no longer being driven only by physical demand.

This matters because the physical backdrop still looks mixed. China continues to show softer import premiums and a looser forward curve. Nearby availability does not look especially tight. However, speculative flows and fading producer hedging have left the market more exposed to rapid repricing.

Speculative Copper Rally Has Pushed Prices Beyond Fundamental Value

The speculative copper rally has extended well beyond what Sucden sees as fair value. The broker places that range at about $10,500-11,500/t. Yet prices have moved much higher as systematic flows entered hard assets. Consequently, copper now behaves more like gold and silver during periods of macro stress.

Tariff fears have amplified that move. US stock builds reflect concern over possible refined copper tariffs. Even if tariffs are never fully imposed, the market still has to price the risk. As a result, regional flows and inventory behavior remain distorted.

Liquidity conditions have also become more fragile. Higher funding costs and exchange margin hikes have reduced balance-sheet capacity. That makes price moves more abrupt and less orderly. Meanwhile, options activity at higher strike levels is reinforcing the speculative tone.

Copper Market Surplus Looks Thin, but Correction Risk Is Rising

The copper market surplus expected for 2026 remains very small. Sucden sees only a thin surplus of around 50,000t. That leaves the market highly sensitive to any new mine disruption or downgrade. Therefore, the medium-term copper story still supports structurally firm prices.

Longer term, the fundamentals remain constructive. Mine growth in Chile and Peru is struggling to keep pace with electrification demand. Data centres and grid investment are adding further support. Meanwhile, new project pipelines remain constrained by underinvestment and long lead times.

However, the biggest risk may now be a reversal in macro sentiment. If the tariff premium fades and speculative positioning unwinds, prices could fall sharply. A broader loss of confidence, including in the AI-led investment narrative, could trigger that shift. Consequently, copper price volatility may remain extreme even if long-term fundamentals stay supportive.

The Metalnomist Commentary

Copper is no longer trading only on mine supply and industrial demand. It is now absorbing the same macro flows that once mostly lifted gold and silver. That can keep prices elevated, but it also makes the market more vulnerable to sharp corrections when sentiment turns.

KGHM Copper Production Fell in 2025 Despite Stronger Earnings

KGHM

KGHM copper production declined in 2025 after planned maintenance at the Glogow II smelter and refinery in Poland and the first-quarter sale of the McCreedy West mine in Canada. The group’s full-year payable copper output fell 3% on the year to 710,000t.

KGHM copper production was also affected by weaker performance at its North American assets. KGHM International produced 52,200t of payable copper in 2025, down 14% from the previous year, because of the McCreedy West sale, lower recovery rates, and lower copper content in feed.

The weaker KGHM copper production result was partly offset by stronger output from the Sierra Gorda mine in Chile. Payable copper attributable to KGHM’s 55% stake in Sierra Gorda rose 8% on the year to 86,800t, supported by higher copper grades and better recovery rates.

Polish Smelter Maintenance Weighed on Copper Output

KGHM’s Polish operations remained the group’s core production base in 2025. Electrolytic copper production from Polish assets fell 3% on the year to 570,900t because of planned maintenance at Glogow II.

Fourth-quarter electrolytic copper output in Poland rose 1.6% on the year to 149,000t, showing some recovery after maintenance-related disruption. Copper in concentrate from Polish assets totalled 401,100t for the full year, broadly flat compared with 2024.

The results show that KGHM’s Polish copper chain remains operationally stable, but smelter and refinery availability can still influence annual payable production. For European copper supply, this matters because domestic smelting and refining capacity is becoming increasingly strategic as concentrate markets tighten.

Sierra Gorda and Higher Prices Supported Financial Performance

Sierra Gorda delivered a stronger result in 2025 and helped offset weakness elsewhere in the portfolio. KGHM’s attributable copper output from the Chilean mine rose because of better ore grades and recovery rates, while fourth-quarter output increased 6% on the year to 21,900t.

The mine also strengthened KGHM’s by-product profile. Sierra Gorda produced 5mn lb, or 2.27mn kg, of molybdenum in 2025, up 53% from the previous year.

Despite lower copper production, KGHM’s financial performance improved. Group net profit rose 28% on the year to 3.7bn zlotys, while EBITDA increased 22% to 10.3bn zlotys. Stronger copper prices helped support earnings, with the three-month LME copper contract averaging $9,965/t in 2025, up 7% from the previous year.

The Metalnomist Commentary

KGHM’s 2025 results show that copper producers can still improve earnings even when output falls, if prices and asset mix move in their favour. The stronger Sierra Gorda contribution also underlines the value of higher-grade, internationally diversified copper assets.

Chinese Cobalt Prices Expected to Decline Further in 2025 Amid Rising Supply and Weak Demand

Chinese Cobalt Manufacturing

Oversupply and Weak Demand to Push Cobalt Prices Lower

The Chinese cobalt market is set to experience further price declines in 2025, as increasing nickel and copper production, from which cobalt is a by-product, leads to an oversupply that buyers are struggling to absorb.

Currently, Chinese-origin cobalt metal traded in Europe has already seen significant pressure due to a lack of floor pricing on raw materials, a trend expected to persist into the new year. Market insiders suggest that cobalt prices could drop below $9/lb, as fully integrated Chinese producers view cobalt as a credit to their primary metal production, particularly nickel and copper.

For these refiners, cobalt is a secondary concern. As one trading firm explained, some Chinese producers operate with production costs as low as $4,000 per ton while selling at $9,000 per ton. Even if they incur a $50 million loss on cobalt, they may still profit significantly from copper production, which can generate up to $700 million in gains.

Chinese Refiners Likely to Continue Production at a Loss

Unlike non-Chinese refiners, which may curtail supply if cobalt prices fall below $9/lb, some Chinese integrated mining firms and refiners could continue refining hydroxide into metal at a loss-making $7-8/lb.

While there is speculation that some Chinese metal producers may attempt to negotiate floor prices in their contracts, it remains uncertain whether these efforts will succeed. Market participants are closely watching how these negotiations unfold, as they could provide some level of price support if successful.

Global Nickel and Copper Growth to Sustain Cobalt Oversupply

The primary factor driving cobalt’s oversupply is the continued expansion of nickel and copper production, as cobalt is a by-product of both metals.

• Nickel production is set to rise again in 2025 with the launch of new Class 1 nickel refineries in China and Indonesia. This will likely keep London Metal Exchange (LME) three-month official nickel prices within the $15,000-17,000 per ton range, significantly lower than the $30,000 per ton peak in early 2023.

• Copper production is also projected to increase due to expansions at mines such as Kamoa-Kakula in the Democratic Republic of Congo (DRC). Although cobalt sales represent only a minor portion of copper mining revenues, producers still aim to extract value from it as a credit.

Weakened Demand from EV and Chemicals Sectors Further Pressures Prices

While cobalt demand in China has surged by 40%, this has not been enough to counteract weakening demand in other regions, particularly in Europe:

• The electric vehicle (EV) sector in Europe has slowed down, leading to reduced demand for cathode active materials like cobalt.

• The European chemicals industry, particularly in Germany, has struggled due to rising energy costs and broader economic challenges.

Even if prices do increase, China has ample spare refining capacity and could use third-party tolling arrangements to process hydroxide into metal, further maintaining downward price pressure.

Peak Oversupply May Be Near, But Price Recovery Remains Uncertain

Some market participants believe that cobalt hydroxide oversupply may have already peaked. The shift towards lithium iron phosphate (LFP) batteries, which do not use cobalt, has significantly impacted the demand for nickel-cobalt-manganese (NCM) battery chemistries, leading to lower demand for cobalt sulfate and cobalt hydroxide.

However, despite this potential supply peak, weak demand across key industrial sectors suggests that cobalt prices are unlikely to see a strong recovery in the near term.

Conclusion

In 2025, Chinese cobalt prices are expected to remain under pressure due to rising nickel and copper production, ongoing oversupply, and weak demand from the European EV and chemicals sectors. While some believe that the cobalt market may be nearing peak oversupply, prices are unlikely to experience significant upward momentum unless demand rebounds sharply or supply reductions occur.