Investing.com -- Citi analysts expect copper prices to decline by approximately 10% in the second half of 2025, with prices easing to an average of $8,800 per ton as physical demand weakens due to U.S. tariff hikes and economic headwinds.
"We still see copper easing to average $8,800/t through H2’25," Citi wrote.
The drop comes as the U.S. prepares to impose Section 232 tariffs of 25% on copper imports, which Citi believes could be announced as early as April and implemented in May.
The firm cited Bloomberg reports from March 26, which suggested tariffs could be imposed within "several weeks", with the investigation concluding well before the 270-day limit.
"We think a Section 232 tariff announcement is plausible in April with implementation as early as May," Citi noted, adding that tariffs might also arrive through the reciprocal tariff channel as soon as April 2, though it is unclear whether Chile, a major copper exporter, will be targeted.
These tariffs are expected to significantly impact global copper trade. "We see the COMEX-LME arb moving to price close to 25%," Citi analysts wrote, predicting that U.S. import demand for refined copper will collapse as a result.
The firm also foresees "near-term downside for LME flat price (to $9,500/t)" and increased pressure on spreads.
Despite this, China’s refined copper import demand could limit some of the downside pressure in Q2 2025, as tighter ex-U.S. scrap availability supports prices.
However, Citi expects broader physical demand to weaken in response to U.S. tariff policies, leading to a sustained decline in prices through the latter half of the year.