Analysts raise copper price forecasts, but tariff hangover will still weigh on prices
2025-07-30 01:26:20
According to a Reuters poll on July 29, 26 analysts raised their median forecasts for copper prices in 2025 and 2026, reflecting market concerns that the 50% U.S. import tariff will push up copper prices.
According to the survey, the London Metal Exchange (LME) spot copper price is expected to reach $9,500 per ton in the fourth quarter of 2025, a 2.7% increase from the $9,250 forecast in July. The average price for 2025 is expected to be $9,525, and $9,796 in 2026. This forecast price is still approximately 2.5% lower than the current LME benchmark price, indicating that the market expects copper price increases to slow in the coming months, dragged down by rising inventories and rapid production growth in China.
"The copper market is gradually adapting to the 'new normal,'" said Thu Lan Nguyen, an analyst at Commerzbank. She pointed out that expectations of U.S. tariffs have led to some copper being shipped to the United States, and inventories in LME-registered warehouses are rebounding, while China's continued rapid growth in copper production has become another negative factor.
Analysts also lowered their forecast for a copper market surplus in 2025 to 40,000 tonnes from 60,560 tonnes, indicating supply pressures have eased somewhat but still exist.
CNBC reported that copper prices fell to a one-week low as the market focused on the U.S. tariff deadline on August 1. Analysts pointed out that tariffs could lead to high copper prices in the U.S. market, while prices in other parts of the world could be under pressure due to weak demand.
Aluminum price forecast and weak demand
Analysts expect U.S. tariffs to curb demand for aluminum in areas such as transportation, construction and packaging, but smaller market surpluses and low inventory levels are providing some support for aluminum prices.
StoneX analyst Natalie Scott-Gray believes that "there is little evidence that aluminum prices have significant upside potential in the short term. Fundamentals lean bearish, with high US prices hurting domestic downstream demand, while the prospect of a higher tariff environment outside the US is curbing global consumption." The LME spot aluminum price is expected to average $2,500 per ton in the fourth quarter, roughly unchanged from $2,518 in the previous survey, but down about 5% from current prices. The 2025 market surplus forecast has been lowered from 280,000 tons to 200,000 tons, reflecting some easing of supply pressures.
Aluminum prices are facing limited upside in the short term, pressured by weak global demand and the prospect of US tariffs. Market participants are focused on the potential impact of China's cancellation of its aluminum export tax rebate policy (effective December 1, 2024) on global supply.
Reuters reported that the aluminum market is constrained by the global economic slowdown and expectations of U.S. tariffs. Analysts expect prices to remain low and volatile in the short term, with relatively low inventory levels providing some support.
Zinc price forecast and oversupply
Zinc is the worst-performing metal on the LME in 2025, primarily due to a surge in refined zinc supply caused by increased mine production, particularly in China. Independent consultant Robin Bhar stated, "The rebound in mine supply and the resulting surge in supply have led to increased refined production, particularly in China." The LME spot zinc price is projected to average $2,700 per ton in the fourth quarter, up 1.9% from $2,650 in the previous survey but down 4.1% from current prices. The global zinc surplus forecast for 2025 has been significantly increased from 12,000 tons to 80,000 tons, indicating a significant increase in supply pressure.
Zinc prices, along with other industrial metals such as aluminum, nickel and steel, have retreated from recent highs as concerns about oversupply intensified, particularly with continued production growth in China, CNBC reported.
Although the data was released earlier, Bloomberg reported a brief rise in zinc prices due to lower smelter processing fees and supply risks. However, recent market trends suggest that zinc prices are constrained by global oversupply and are unlikely to rebound significantly in the short term.
Summarize
Overall, price forecasts for copper, aluminum, and zinc are all subject to the complex influence of US tariffs, weak global demand, and increased Chinese production. While copper prices are expected to rise due to tariff expectations, rising inventories and slowing demand may limit gains. Aluminum prices are being dragged down by weak demand, limiting short-term upward potential. Zinc prices are under pressure from oversupply, resulting in a bearish market outlook. Market uncertainty ahead of the US tariffs taking effect on August 1st is exacerbating price volatility, and investors should closely monitor global economic signals and Chinese policy developments.
According to the survey, the London Metal Exchange (LME) spot copper price is expected to reach $9,500 per ton in the fourth quarter of 2025, a 2.7% increase from the $9,250 forecast in July. The average price for 2025 is expected to be $9,525, and $9,796 in 2026. This forecast price is still approximately 2.5% lower than the current LME benchmark price, indicating that the market expects copper price increases to slow in the coming months, dragged down by rising inventories and rapid production growth in China.
"The copper market is gradually adapting to the 'new normal,'" said Thu Lan Nguyen, an analyst at Commerzbank. She pointed out that expectations of U.S. tariffs have led to some copper being shipped to the United States, and inventories in LME-registered warehouses are rebounding, while China's continued rapid growth in copper production has become another negative factor.
Analysts also lowered their forecast for a copper market surplus in 2025 to 40,000 tonnes from 60,560 tonnes, indicating supply pressures have eased somewhat but still exist.
CNBC reported that copper prices fell to a one-week low as the market focused on the U.S. tariff deadline on August 1. Analysts pointed out that tariffs could lead to high copper prices in the U.S. market, while prices in other parts of the world could be under pressure due to weak demand.
Aluminum price forecast and weak demand
Analysts expect U.S. tariffs to curb demand for aluminum in areas such as transportation, construction and packaging, but smaller market surpluses and low inventory levels are providing some support for aluminum prices.
StoneX analyst Natalie Scott-Gray believes that "there is little evidence that aluminum prices have significant upside potential in the short term. Fundamentals lean bearish, with high US prices hurting domestic downstream demand, while the prospect of a higher tariff environment outside the US is curbing global consumption." The LME spot aluminum price is expected to average $2,500 per ton in the fourth quarter, roughly unchanged from $2,518 in the previous survey, but down about 5% from current prices. The 2025 market surplus forecast has been lowered from 280,000 tons to 200,000 tons, reflecting some easing of supply pressures.
Aluminum prices are facing limited upside in the short term, pressured by weak global demand and the prospect of US tariffs. Market participants are focused on the potential impact of China's cancellation of its aluminum export tax rebate policy (effective December 1, 2024) on global supply.
Reuters reported that the aluminum market is constrained by the global economic slowdown and expectations of U.S. tariffs. Analysts expect prices to remain low and volatile in the short term, with relatively low inventory levels providing some support.
Zinc price forecast and oversupply
Zinc is the worst-performing metal on the LME in 2025, primarily due to a surge in refined zinc supply caused by increased mine production, particularly in China. Independent consultant Robin Bhar stated, "The rebound in mine supply and the resulting surge in supply have led to increased refined production, particularly in China." The LME spot zinc price is projected to average $2,700 per ton in the fourth quarter, up 1.9% from $2,650 in the previous survey but down 4.1% from current prices. The global zinc surplus forecast for 2025 has been significantly increased from 12,000 tons to 80,000 tons, indicating a significant increase in supply pressure.
Zinc prices, along with other industrial metals such as aluminum, nickel and steel, have retreated from recent highs as concerns about oversupply intensified, particularly with continued production growth in China, CNBC reported.
Although the data was released earlier, Bloomberg reported a brief rise in zinc prices due to lower smelter processing fees and supply risks. However, recent market trends suggest that zinc prices are constrained by global oversupply and are unlikely to rebound significantly in the short term.
Summarize
Overall, price forecasts for copper, aluminum, and zinc are all subject to the complex influence of US tariffs, weak global demand, and increased Chinese production. While copper prices are expected to rise due to tariff expectations, rising inventories and slowing demand may limit gains. Aluminum prices are being dragged down by weak demand, limiting short-term upward potential. Zinc prices are under pressure from oversupply, resulting in a bearish market outlook. Market uncertainty ahead of the US tariffs taking effect on August 1st is exacerbating price volatility, and investors should closely monitor global economic signals and Chinese policy developments.
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