MARKET COMMENTARY
In December, LME 3M copper prices traded within a range of $11,121–$12,960, ending the month at $12,496.5 and posting a monthly gain of 11.82%. The rally was primarily driven by intensifying supply-side concerns, supported by robust macroeconomic signals from the United States and a persistently weaker U.S. dollar.
Prices found early support following the approval of production cut plans for 2026 by major Chinese smelters, the world’s largest copper consumers, alongside Codelco’s record-high premium offers, which reinforced expectations of a tightening concentrate market. Sentiment was further boosted by Citi’s upward revision of its copper price forecasts and continued optimism surrounding U.S. monetary policy. Weaker-than-expected industrial production data from China also shifted market focus toward supply constraints rather than demand weakness.
Momentum strengthened toward month-end after Antofagasta reached an agreement with a Chinese smelter on zero treatment charges for 2026 copper concentrate, a development that underscored severe tightness in the concentrate market. At the same time, strong U.S. economic growth data supported demand expectations, while the softer U.S. dollar remained price-positive. As a result, copper tested its all-time high of $12,960 on Monday, December 29, 2025, before closing the month slightly lower.
On a weekly basis, LME 3M copper posted solid gains throughout most of December:
- First week: Prices rallied sharply amid escalating supply concerns, supported by Chinese smelters’ production cut plans and Codelco’s elevated premiums. Copper tested an all-time high of $11,705 and closed the week at $11,665, up 4.38%.
- Second week: Up trend continued, driven by China’s fiscal stimulus commitments, Fed rate cuts that weakened the U.S. dollar, and continued inflows of copper into U.S. inventories, raising concerns over tightening supply elsewhere. After reaching $11,952, prices retreated on renewed concerns around the AI sector and profit-taking, closing the week at $11,552.5, down 0.96%.
- Third week: Trading turned volatile amid mixed demand signals from China and position reductions ahead of the Christmas holiday. Late-week support emerged following Goldman Sachs’ upward revisions, highlighting structural constraints in mine supply. Copper closed the week at $11,870.5, up 2.75%.
- Final week: Prices revisited record highs after the Antofagasta agreement on zero treatment charges. During the shortened holiday week, copper remained supported by strong U.S. economic data and a weaker dollar, testing a new all-time high of $12,282 before closing at $12,133, up 2.21% on the week.
Full-Year 2025 Overview
In 2025, LME 3M copper traded within a wide range of $8,105–$12,960, surging to near $13,000 per tonne and reaching successive all-time highs. Prices posted an annual gain of 42.30%, driven by persistent mine supply disruptions, U.S. strategic stockpiling, and a sharp increase in copper shipments to the United States, which deepened global supply imbalances.
Additional upside pressure stemmed from production setbacks at Indonesia’s Grasberg mine following an accident in September and concerns over potential U.S. copper tariffs in 2026. Looking ahead, analysts expect elevated price volatility, particularly in the first quarter of 2026. Meanwhile, China has pledged to expand fiscal spending and maintain government support for economic growth, with increased investment planned in advanced manufacturing, technological innovation, and human capital development.
Supported by these structurally bullish factors, copper prices closed 2025 at $12,496.5, capping one of the strongest annual performances in recent history.
