This opinion piece discusses the main trends in the global copper market in 2024 and looks forward to where LME copper prices may be heading in 2025.

It reviews changes in demand, supply and scrap across the major geographical markets. This article will be published in the forthcoming issue of Recycling Today magazine.

Copper market is now becalmed after a volatile H1 2024

LME cash copper prices started the year at a low of US$8,430/t yet surged to a high of US$10,857/t by 20 May. The rally was largely speculative, fuelled by knowledge that China was importing vast quantities of copper in all forms, far exceeding its consumption needs, and likely adding to its strategic copper stockpiles.

BHP’s hostile takeover bid for Anglo American, powered by the desire to secure the latter company’s South American copper mine assets, further stoked the fire. This drove prices up beyond levels justified by underlying supply-demand fundamentals. When BHP withdrew from the potential deal, the rally quickly lost steam and prices retreated, giving up nearly all their first half gains.

In truth, 2024 was a disappointing year for consumption growth

From a fundamental perspective, 2024 was a disappointing outcome for global demand. Chinese consumption likely declined, as the dire state of the construction market more than offset some advances in many other end use markets.

Outside of China, there were some bright pockets of growth. India continues to perform exceptionally well, with offtake growing by close to double digit levels. Taiwan, Malaysia, and Indonesia also recorded healthy rises while the Middle East, led by Saudi Arabia, was the other main bright spot.

North America posted a low steady improvement, but Europe was a major disappointment. However, across every geography the same trend was visible. Demand for copper wire rod for electrical applications outperformed that for brass mill products. Project Blue’s preliminary estimates suggest global copper demand grew by less than 1% in 2024.

Copper receiving mixed signals from the energy transition

The much-heralded advent of electric vehicles (EVs) was talked about as being ‘game changer’ for the copper industry, but outside of China, that vision has changed as sales have stalled.

Chinese assembly of EVs surged by 37.5% in the year to November 2024, but elsewhere production and sales have slowed as most consumers retrenched to battle the cost-of-living crisis. Investments in new foil mills in the Rest of the World have been paused or cancelled since the demand for foil for lithium-ion batteries for EVs is slowing.

But by contrast, the tempo of offshore wind power investment has been undiminished. Suppliers of submarine power cables have multi-year orderbooks and have accelerated their spending on capacity expansions, new greenfield plants and cable laying vessels to accelerate project delivery. Although the volumes of copper required are not yet huge, this has been the best performing end use segment of global copper consumption in 2024

Most miners continue to face an uphill battle to maintain production...

Most of the world’s major miners have struggled to maintain output at prior year levels. The USA serves as a notable example, with total copper mine production falling by 6.8% y-o-y to 887kt in the year to October.

Contributing factors include falling ore grades, disruptions, and slower project ramp ups. Financial constraints are also a significant restriction on the ability of miners to raise the capital necessary to fund billion-dollar brownfield and greenfield mine projects. BHP’s thwarted takeover of Anglo American seemed to confirm to preference to “buy not build,” since it takes on average over 15 years to develop a new greenfield mine project once you have been fortunate enough to discover one.

Miners are increasingly turning their attention to new mining districts such as Kazakhstan, Uzbekistan, Pakistan, and Argentina, but as the painful experience of Cobre de Panama has shown, this is no guarantee of success.

...But the DR Congo delivers an exceptional production performance

But that is not the same everywhere. Copper mine output in the DR Congo rose 10% y-o-y to 2.46Mt in the first ten months of 2024, although the increase would have been even larger were it not due to the impact of disruptions to power grid supplies.

The Kamoa-Kakula mine complex reported a 12% annual increase in its mine production to 437kt of copper-in-concentrate. Its production guidance for 2025 is even higher and stated to be around 520-580kt.

The DR Congo overtook Peru last year to become the world’s second ranked producer of mined copper with national output just below 3Mt compared to 2.7Mt for Peru. Chile, the world’s leading producer of mined copper, will deliver output of 5.4Mt in 2024, around 3% higher than in 2023.

Chinese smelters forced to accept low TC/RC annual benchmark for 2025

The overall mismatch between the challenging situation in concentrate supply, and the commissioning of new smelters who require new feedstock, manifested itself in a new low in annual TC/RC benchmark terms.

Chinese smelters agreed 2025 terms with Antofagasta Minerals at US$21.25/t and 2.125 cents per pound compared to US$80/t and 8 cents per pound in 2024. Last year saw several new smelters commissioned in China, India, and Indonesia, with a further new smelter set to open in the DR Congo in Q2 2025.

This left too little concentrate being chased by too many smelters, resulting in terms shifting in favour of the miners. Industry consensus is that there should be some output cutbacks by the smelters, but thus far no individual smelter has taken that action.

Smelters’ woes have not been aided by reduced supplies of anode and blister from Africa and Chile, and lower byproduct prices for sulphuric acid. However, for those (Chinese) smelters who could take it, copper scrap supply was healthy for most of the year.

Scrap was the most dynamic component of the copper market in 2024

Project Blue estimates that global imports of copper and copper alloy scrap may have grown by 5-6% last year in copper content terms, that is five to six times faster than the growth in total copper demand.

One third of this scrap is used by smelters and refineries to produce new cathodes, while two-thirds are directly melted by fabricators to make copper and copper alloy semi-manufactures.

However, the novel factor in the market in 2024 was that Chinese and Hong Kong imports of copper scrap leapt by almost 13% to 1.9Mt copper content, while imports in the Rest of the World edged up just 0.5% to 2.3Mt copper content.

Thus, the Chinese share of world scrap trade has risen from 35% in 2021 to 45% by 2024. Could this reach 50% in 2025 given the tightness in the concentrates market?

Investments in recycling and secondary copper plants may provide the answer

The growing availability of copper scrap, combined with its high purity and more consistent quality, has encouraged the more progressive companies in the copper industry to invest in brand new secondary smelters and greenfield foundry facilities.

For example, in the USA, Aurubis will commission the first phase of its Richmond, Georgia, smelter in Q2 2025, while Wieland North America will open its foundry in Louisville, Kentucky, in Q1 2025. This is just a small cross section of a number of secondary investments that are underway globally.

These projects pose much lower business risks than greenfield mine investments and can commission in only 1-3 years. Collectively, these new projects will absorb some of the ‘surplus’ scrap now generated in the West and shipped to China, India, and Malaysia.

Copper is poised to be recognised as a critical raw material

In the USA, copper is on the verge of being acknowledged as a critical raw material and a vital element to achieving the energy transition. Copper’s proven and reliable electrical and thermal conductivity properties are unsurpassed, as is its low carbon footprint compared to aluminium.

Copper is infinitely recyclable, and secondary copper has even more superior energy saving and CO2 credentials than its primary cousin. End use consumers, across a range of industries, are increasingly showing more interest in sourcing copper products with a greater recycled content (either wholly or partially).

Over the next decade, enhanced copper recycling will play a pivotal role in a more sustainable world.

The outlook for 2025 is clouded by uncertainty

The copper market enters the New Year with even more uncertainty than usual. Trade relations between the USA and China are likely to set the tone for the year ahead. The war in Ukraine is in stalemate and the situation in the Middle East remains tense.

Project Blue sees the refined copper market in modest surplus through 2025, with prices likely to trade sidewards and takes their cues from global political and economic events. Cathode premium in Shanghai have improved to US$70/t recently, but there are no signs of any underlying improvement in Chinese demand.

Producers and traders will wait until March to see what China’s appetite for copper will be after the Lunar New Year holiday is over. No doubt it will be an unpredictable year for the red metal in 2025.