Citi Research Lowers Copper Price Forecast

Citi Research has revised its short-term copper price forecast as of Wednesday, highlighting concerns about ongoing trade tensions between the United States and China. Weaker-than-expected economic growth in China is also projected to dampen global demand for copper.

Revised Price Projections

• Current forecast: $8,500 per metric ton
• Previous forecast: $9,500 per metric ton
• Expected average for Q4 2024: $9,000 per metric ton

Factors Affecting Demand

• Possible U.S. policy changes might increase tariffs on Chinese imports, further affecting copper demand and inflating costs.
• China's hesitance in announcing substantial economic stimulus measures has surprised analysts, raising concerns about a recovery in the manufacturing sector.

Investor Sentiment

Despite elevated net long positions in copper reflecting bullish bets, these positions are vulnerable to declines due to trade policy uncertainties and inconsistent economic signals.

Citi notes a disconnect between the current manufacturing market sentiment and copper positioning, potentially prompting further reductions in long positions as traders recalibrate their expectations for a manufacturing recovery in 2025.

Outlook

Citi forecasts that pressures on copper and base metals will continue until the year’s end, particularly if additional U.S. tariffs exacerbate economic conditions in China. However, the firm expects a medium-term recovery for copper prices due to decarbonization demand—such as for electric vehicles and renewable energy—although robust price recovery may be delayed until late 2025.