Without a doubt: 2023 was not a standout year for copper. Below you can see the development of the copper price on a 1-year basis (copper price per tonne, as of 08.01.2024):

Source: Frankfurt Stock Exchange (https://www.boerse-frankfurt.de/rohstoff/kupferpreis)

The significant decline in copper price in the first half of the year and the subsequent rebound, which was quickly sold off, is striking. And even the comeback that began in the fall seems to be in danger at the moment.

Copper price 2024 and 2025: Could a +75% increase be possible? Nevertheless, many experts agree that the fundamental opportunities surrounding copper are still intact. Now a new forecast is causing a stir in this context. According to it, as an investor, you could potentially be looking at significant return opportunities. But let’s start from the beginning: The focus is on a report by the US news channel CNBC, which quotes analysts from BMI, among others. BMI is a research unit of the US rating agency Fitch.

The experts are not playing it safe this time. According to them, the copper price could increase by more than 75% over the next two years. BMI justifies this ambitious growth outlook with a weak supply from mining and a strong demand outlook in the context of the energy transition. In addition, the US Federal Reserve is expected to lower interest rates in 2024. As a result, the US dollar is expected to weaken, making copper traded in US dollars more attractive to foreign buyers, according to BMI analysts. According to the experts, this effect should become visible no later than the second half of 2024.

After COP28: New opportunities for copper But there’s more: Other renowned analytical institutes also see enormous potential for copper. For example, Citibank sees new opportunities for the metal in the wake of the UN Climate Conference COP28 held at the end of 2023. In Dubai, more than 60 countries supported a plan to triple global renewable energy capacity by 2030.

Since copper is a vital raw material for many ecological technologies such as wind turbines, solar panels, and electric cars, Citibank predicts an „extremely bullish“ scenario. Just last December, the investment bank raised its forecast for copper demand until 2030 by an additional 4.2 million tonnes.

However, copper remains highly dependent on the world economy as an industrial metal. According to Citibank, the bullish forecast assumes a very soft landing of the economy in the US and Europe, as well as an earlier recovery of global growth and a significant upturn in China. This means that as long as recession fears persist, the pressure on the copper price is unlikely to ease. However, Citibank remains overall optimistic.

Copper market likely to tighten significantly And even Goldman Sachs is looking rather positively at the return opportunities surrounding the energy transition metal. The analysts from the renowned investment institution foresee a deficit of half a million tonnes for 2024.

Goldman attributes this mainly to the production halt at the Cobre Panama copper mine (First Quantum Minerals) in November following a constitutional ruling by the country’s Supreme Court. This is expected to reduce global copper output. In addition, the big player Anglo American recently announced production cuts for 2024 and 2025, in this case, to reduce costs.

According to Goldman Sachs, the supply cuts are likely to result in a significant tightening of the copper market. The analysts expect the value of the metal to rise to over $10,000 per tonne in 2024. In 2025, the price is expected to be even higher – at around $15,000. For comparison: On Monday, a tonne cost around $8,400 at the London Metal Exchange (LME).

My conclusion for you Few other commodities are as crucial for the future as copper. And, in my opinion, few other metals offer such strong investment potential for you as an investor. Of course, the high forecasts of analytical institutes still have to be proven. The last few years have shown that the global economy is highly vulnerable to geopolitical upheavals, wars, pandemics, and other crises. But if the mood gradually improves now, copper would be one of the major beneficiaries of the already significant potential of the energy transition.

As an investor, you can position yourself for this scenario with stocks such as Rio Tinto, BHP, or Freeport-McMoRan. If you want to diversify your investment risk, well-known copper ETFs or ETCs also remain interesting return vehicles, in my opinion.