Copper price hits new high, Citibank forecasts next stop at $13,000.

As copper prices reach historic highs, Citi’s bullish forecast injects new momentum into the rally.

On Friday, Citi projected in its baseline scenario that, due to US stockpiling causing supply shortages in other regions, copper prices will average $13,000 per ton in the second quarter of next year. Currently, copper prices have climbed 1.97% to $11,675 per ton, surpassing the previous high set earlier this week.

The team of Citi analysts, including Max Layton, said that multiple bullish factors will support the upward trend in copper prices until 2026. These catalysts include a more accommodative interest rate environment, US fiscal expansion, Europe’s military restructuring, and the energy transition. Citi forecasts global copper end-use consumption will grow by 2.5% next year.

Expectations of US import tariffs next year are driving metal flows into the US, resulting in inventory drain in other major regions. According to sources, merchant Mercuria Energy Group has placed orders to withdraw about $500 million worth of copper from London Metal Exchange warehouses, possibly in preparation for supply tightness.

A BloombergNEF report on Thursday shows that the copper market will enter a structural shortage starting next year, and the supply gap will continue to widen over the next decade under strong demand and limited supply. As a key material for pipelines, electric cables, and electric vehicles, copper prices have risen by over 30% this year on the London Metal Exchange.

Wall Street Forecasts Diverge

Despite Citi’s bullish outlook, other analysis firms are more conservative about copper’s prospects. In a Thursday report led by Peter Taylor, Macquarie’s analyst team pointed out that while copper prices are expected to remain "volatile" and may hit new highs, prices above $11,000 per ton are unsustainable, as the global market is not truly tight.

Goldman Sachs believes copper prices have diverged from fundamentals in the short term, forecasting a global copper surplus of 500,000 tons in 2025, making it difficult for prices to remain above $11,000 per ton in the near term. Yet, in the long run, copper remains Goldman’s “favorite.” The bank expects copper prices to range between $10,000 and $11,000 per ton in 2026, with $10,000 serving as a solid price floor. Goldman predicts the real supply shortage will begin in 2029, and expects LME copper prices to reach $15,000/ton by 2035.

Macquarie’s cautious stance echoes Goldman’s views earlier this week, which also do not expect copper shortages to appear before 2029.

Inventory Mismatch Intensifies Market Tightness

Global exchange copper inventories have soared above 656,000 tons, the highest since 2018, with around 60% stored in warehouses owned by the US Commodity Exchange. This distribution highlights the regional imbalance in the market.

JPMorgan defines the current situation as copper entering a "more volatile, more aggressively bullish mid-stage," with its core logic being that the US siphoning effect forces non-US buyers to scramble for spot, causing LME inventory to fall below the 100,000-ton threshold, triggering an asymmetric bullish channel for copper prices.

JPMorgan’s 'bullish endgame' presumes that LME prices must rise enough to reverse the US copper arbitrage window and force resources to flow out of the US, thereby ending the bull market triggered by inventory mismatches.

Structural Demand Supports Long-Term Outlook

Citi emphasizes that the gradual improvement of macro and fundamental backdrops supports its confidence in copper’s rally. Lower interest rates and US fiscal expansion will drive growth, while Europe’s military restructuring and energy transition will boost demand.

Goldman Sachs’ long-term bullish stance is likewise based on structural factors, including strong demand in power grids, electrical infrastructure, artificial intelligence, and defense, as well as the reality of constrained mine supply.

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