Quick overview

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Citi analysts predict that a combination of declining Chinese demand and tariff-related inventory unwinds will put pressure on copper prices in the second half of 2025.

 

According to a recent Citi note, Section 232 and China solar frontloading payback are causing “2H’25 demand and price headwinds” for copper. Citing the anticipated unwinding of excess US imports and a slowdown in China’s use of copper linked to renewable energy, the bank projects prices to drop to $8,800 per tonne over the next three months.

According to Citi’s Global Copper End-Use Tracker (GCET) data from May, record solar installations in China ahead of a June regulatory change are to blame for a dramatic 16 percent year-over-year increase in copper consumption. Citi warned that this was “anomalous,” though, and that the solar boost would “disappear from June data onwards.”.

President Trump’s announcement of a proposed 50 percent Section 232 tariff effective August 1st should discourage further copper shipments.

The bank highlighted that by the end of July, about 500kt of excess copper imports have arrived, “enough to negate US copper import demand for the remainder of 2025.”

Citi also cautioned that tariff headwinds should “weigh on moderately elevated copper positioning, along with ex-US prices and spreads,” as well as the fact that overall global manufacturing activity is still weak. In the medium term, Citi is still positive despite the short-term pessimism.

“We are still medium-term copper bulls,” the note stated, citing projections of “$10k/t average in 2026 and $11k/t in 2027,” bolstered by demand for energy transition and a more positive outlook for global growth