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Copper price forecast: Is the metal a buy on China reopening expectations?

By Nicole Willing

Edited by Valerie Medleva


Copper bars
Where next for the copper price? – Photo: Flegere /

The price of copper has made some headway after falling to its lowest level since November 2020 on 15 July 2022. The metal started 2023 at $3.84 and has risen 6.7% to trade at around $4.10 as of the time of writing on 14 April, although base metal prices have retreated significantly since the record highs seen in March last year. 

Metals markets remain highly volatile in the face of macroeconomic pressures. The price of copper came under particular pressure last year due to fears of a global recession, weaker demand from Chinese manufacturing giants and China’s zero-Covid policy, a higher US dollar, and a mass sell-off on the London Metal Exchange (LME). 

Over the closing months of 2022, however, the metal began to recover as investors once again flocked to cyclical metals in response to a lower USD and rising prospects for a reopening in China.

Live copper spot price chart

Is the current price a buying opportunity, or would a short position on copper be more profitable?

In this article, we look at the drivers for the recent market volatility, and examine some copper price predictions from a few analysts.  

Copper retreats from record highs 

The price trend of copper was choppy at the start of the year, as pandemic-related lockdowns across several regions in China raised concerns about a slowdown in economic growth just as industrial production had ramped up following the Lunar New Year holiday.

Manufacturing plants in Changchun suspended operations and construction work was halted in Shanghai, reducing consumption in the world’s largest copper market. 

At the end of February, traders weighed the impact of the Russia-Ukraine conflict on commodities and stockpiled industrial metals. On rising demand and tightening supply, prices for copper – as well as aluminium, tin and zinc – reached record highs in March.

The COMEX copper price chart shows that the metal climbed by 130% from the March 2020 low at the start of Covid-19 lockdowns to trade up to $5 a pound in early March 2022.

Copper Price Chart (2017-2022)

In addition to the recovery in demand after the pandemic, there are several long-term demand trends that have been supportive to copper.

The transition to clean energy requires larger quantities of copper, which is used for wiring in electric vehicles (EVs) and solar panels. Higher crude oil and gas prices are raising operational costs for copper producers, but also accelerating the energy transition and in turn increasing copper demand.

The pandemic also saw a boom in demand for manufactured goods, including electronics and household appliances, as consumers turned to home entertainment and home improvement during lockdowns.

What’s more, while demand has climbed, output from copper mines has not kept pace, tightening the supply balance.

Aggressive interest rate rises by central banks, including the US Federal Reserve (Fed), to tackle 40-year-high inflation have increased concerns among traders that the global economy could be facing a hard landing. 

At its 31 January – 1 February policy meeting, the Fed opted to moderate the pace of rate hikes, lifting its benchmark overnight interest rate by a quarter of a percentage point to the 4.50%-4.75% range. 

Goldman Sachs and Bank of America recently said they expect the US Federal Reserve to raise interest rates three more times this year, lifting their estimates after data pointed to persistent inflation and a resilient labor market.

"In light of the stronger growth and firmer inflation news, we are adding a 25bp (basis points) rate hike in June to our Fed forecast, for a peak funds rate of 5.25%-5.5%," Goldman Sachs economists led by Jan Hatzius said in a note dated Thursday.

The Caixin Manufacturing Purchasing Managers’ Index (PMI) for China edged up to to 49.2 in January 2023 from a three-month low of 49.0 in December, coming in below market forecasts of 49.5. However, the reading marked the sixth straight month of declining factory activity, amid sluggish operations after an abrupt shift in COVID policy.

Output fell the least in 5 months while a fall in new orders eased. Buying levels dropped at the slowest pace in 3 months; while foreign demand remained weak, falling for the sixth month.

“The pandemic continued to take a toll on the economy in January,” said Dr Wang Zhe, an economist at Caixin Insight Group. “Supply and demand weakened, overseas demand was sluggish, employment declined, and logistics hadn’t fully recovered, while the quantity of purchases shrank, inventories dropped, and manufacturers faced growing pressure on profitability. But optimism in the sector continued to improve as businesses expected a post-Covid economic recovery.”

Zhe added:

"Since Covid controls were optimized at the end of 2022, China has seen a surge in Covid infections. According to the Chinese Center for Disease Control and Prevention, the numbers of fever clinic visits nationwide and people hospitalized with Covid peaked in late December and early January, respectively, and have declined since then."

"After being hit by the latest wave of Covid infections, the primary focus of economic work should be on accelerating economic recovery and promoting normalized production and social orders. Improving expectations, restoring confidence, increasing income, expanding consumption, and stimulating domestic demand will be among the priorities. There is still uncertainty in how the pandemic will develop, so full preparation should be made to deal with the next wave of the virus. China will still need to effectively coordinate pandemic containment with economic and social development."

In the most recent Caixin China General Manufacturing PMI press release, the report highlighted the impact of Covid restrictions on the manufacturing sector, stressing that market optimism was at it highest in close to two years: 

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"The return to more normal business operations, and hopes that the economy and new business will rebound, helped to lift business confidence at the start of the year. Notably, the degree of optimism was the highest recorded since April 2021."

In the latest copper news, LME on-warrant copper stocks have fallen the most since 8 December, according to data from the exchange cited by ING Group's Warren Patterson and Ewa Manthey. On-warrant stockpiles fell by 7.5% to 51,800 tonnes, with declines coming from warehouses in Germany and the Netherlands.

First Quantum will suspend copper ore processing at its Panama mine on 23 February, according to a report from Reuters, due to limited storage capacity at the site. The Maritime Authority of Panama banned loading copper at Cobre Panama’s port over a certification issue in December last year. The mine accounts for 1.5% of global copper production.

Investors are continuing to monitor the extent of improved Chinese purchasing after the country’s economic reopening, as new home sales grew for a third straight week in 16 major cities. Industrial demand is also expected to pick up as the government is set to announce further stimulus measures at its National People’s Congress in March. On the supply side, a series of production and export disruptions by major producers in South and Central America compounded concerns about low inventories in the US and Europe, adding to worries that copper markets could be heading into a severe deficit.

The metal was trading at around $4.15 per pound as of 21 February 2023, down from its record high of $4.27 on 26 January and tracking the increase in other base metals amid persistent supply concerns and strong demand expectations. It is also worth noting the market remains well above the March 2020 low of $2.17.

The copper price history shows the market has been trending higher since 2018, turning around an extended decline that started in 2010.

What is the long-term copper outlook? Do analysts expect prices to rise or fall? We look at some of the latest copper price forecasts and analysis below. 

Copper price forecast: Should you buy, hold or sell? 

On 21 February 2022, analysis of copper on the Comex exchange in the US by brokerage Zaner was hesitant to show a bullish forecast for the short-term price trend of copper:

“Despite a risk off vibe in financial and many physical commodities markets this morning, the copper market has extended last week's sharp recovery move and nearly tested the February high. While the COT report has been suspended due to hacking, the last spec positioning report showed a relatively low net long with the market currently sitting $0.05 below the level where that positioning was last measured. Apparently, the copper trade is unconcerned about the buildup of Chinese domestic physical supply and has also seen signs that China continues to utilize scrap copper to produce cathode rods. In fact, Bloomberg overnight indicated that domestic copper stocks inside China added 4500 metric tons over the weekend. However, the current copper trade is willing to discount the 2023 trend of higher Shanghai copper stocks and even higher regional copper inventories in China."

"Initially March copper has found resistance at $4.20, but the market from last week's lows has gained $0.22 and has managed those gains in the face of distinct supply building inside China. If it were not for the risk off sentiment and looming rate hike threats from the US, we would be more upbeat toward near-term copper price action. Nonetheless, the strength of the market looks to lift prices above $4.20 and consolidate with resistance seen at $4.30." analyst Piero Cingari highlighted the metal’s price dependence on the situation in China in his copper price outlook for 2023:

“Copper’s chances of hitting the $4.00 zone and shattering it increase the sooner China announces an economic openness. $4.62 might be an intriguing bullish target for the first half of 2023, as it would represent a 78.6% retracement of the range of 2022.

“If the scenario doesn’t play out as expected and copper retraces to the downside, the $3.50–$3.58 support area, if reached, may likely reinstate bull buying action on dips. Copper traded at these levels when Chinese authorities first announced efforts to ease Covid restrictions in November."

“A fall to $3.50 or below would signal a complete reversal of Chinese authorities’ attempts to unlock the economy and a broader dollar surge on the basis of fresh hawkish fears from the Fed, and thus a retest of such levels seems to have fewer probabilities at this time.”

In a comment to, independent consultant Robin Bhar said: “There’s high-level data showing that things are beginning to stir in China, but when it comes to infrastructure and construction, it will take a bit more time. There’s good dip buying around to support the underside. People are taking the opportunity to build longs, whether tactically as we go into Q2 or strategically because of the green energy transition.”

Saxo Bank Head of Commodity Strategy Ole Hansen recently told CNBC that industrial metals such as copper, aluminum and lithium would undoubtedly benefit from the “enormous political capital” being invested in achieving the “green transformation.”

“The new geopolitical environment will mean a massive boost for the European defence industry which should see double-digit growth rates close to 20 percent per year over the next economic cycle as the European continent doubles its military spending in percentage of GDP." 

Hansen added that the metal's strong start to the year – copper futures have gained close to 10% year-to-date – are due to “technical and speculative traders frontrunning an expected pickup in demand from China in the coming months”.

“Once the initial rally is over, the hard work begins to support those gains, with an underlying rise in physical demand needed to sustain the rally, not least considering the prospect of increased supply in 2023 as several projects go live.

“Overall we see copper settle into a $3.75 to $4.75 range during the coming months before eventually breaking higher to reach a new record sometime during the second half.”

Analysis by Trading Economics also leaned towards the bearish side on the future price, expecting copper to trade at $3.96 a pound by the end of the current quarter and $3.70 in 12 months’ time. 

Algorithm-based forecasting site Wallet Investor was more positive regarding the longer-term market outlook, predicting the price could rise over the coming years. The website’s copper price forecast for 2023 estimated that the price could reach $4.162 by the end of the year, while its copper price forecast for 2025 suggested a copper price target of $4.985.

On 14 March 2023, analysts at Fitch Solutions revised up their forecasts, suggesting copper could average $8,800 a tonne in 2023 and $8,000 in 2024. 

“Our increased copper assumptions for 2023-2025 reflect our expectation of a tight balance in the market. China’s re-opening will support growing short-term demand as China accounts for 55% of global refined copper consumption. Medium- and long-term demand for copper is supported by the energy transition. Still, mine underperformance in Chile, political protests in Peru and recent issues in the smelting sector may constrain copper supply.” they said.

Analysts at Canada’s TD Securities see the potential for further downside, writing in a copper price analysis: “Timing a market squeeze is an art, particularly amid poor liquidity conditions. Under the crushing weight of a collapse in commodity demand, copper prices have slashed through every support level.”

In its October 2022 commodities forecast, the World Bank expected prices to decline over the next few years, from £8,700 a tonne in 2022 to $7,300 in 2023 and $7,361 in 2024. 

Citi previously predicted in its copper price forecast for 2030 that the metal could trade at $10,756 a tonne by the end of the decade, with a bull case of $14,341 and a bear case of $8,963. 

When considering any market predictions, it’s important to keep in mind that commodity prices are highly volatile, making it difficult to accurately predict where prices will be at any given time in the future. You should always do your own research.

Remember that past performance is no guarantee of future returns, and never invest any money that you cannot afford to lose.


Is copper a good investment?

Copper is a highly volatile commodity, offering the potential for high returns with the switch to electric vehicles but, like any commodity, is also at risk from economic fluctuations.

Whether copper is a good fit for your portfolio depends on your risk tolerance, investing strategy and portfolio composition, among other factors. You should do your own research, and never invest any money that you cannot afford to lose.

Will copper prices go up or down?

As of April 2023 the outlook for the copper market was mixed. Some forecasts suggested prices could rise while others expected them to fall.

This emphasises the importance of doing your own research to take a view of the market. Always keep in mind that analysts can and do get their predictions wrong.

Should I invest in copper?

Whether you should invest in copper is a personal decision you should make based on your risk tolerance, portfolio goals and how much money you have to invest. You should do your own research on the market.

Keep in mind that past performance is no guarantee of future returns, and never invest more than you can afford to lose.

What affects the price of copper?

Copper prices are driven by factors such as demand and supply, the value of the US dollar, government monetary policy and overall sentiment on the global economy, among other factors.

The move to more environmentally-friendly forms of energy generation such as wind and solar, and the coming ban in many parts of the world on the sale of new vehicles with internal combusion engines, should boost the price of copper over the longer term. However, commodities can be highly volatile in the short term.

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