A highly regarded copper market bull has once again predicted that copper prices will reach new historical highs. Kostas Bintas, head of Macquarie's energy metals business, stated that Trump's tariff threats and declining global copper inventories will provide traders with unprecedented profit opportunities. Bintas, a renowned metal trader in the industry, previously made copper trading operations one of the largest globally while at Trafigura Group.
He predicts that copper prices could increase by one-third from current levels, surpassing $12,000 to $13,000 per ton. He believes that as vast amounts of copper flow into the United States, other regions, especially China, the largest consumer, will face severe shortages. "The copper market is undergoing unusual changes, and the surge in copper prices is not unreasonable," Bintas stated.
Previously, the copper market entered a bull phase post-pandemic, with electrification demand expected to outstrip supply growth. Bintas was one of the first to propose this view. While collaborating with former Goldman Sachs metals strategist Nick Snowdon, Bintas predicted that the average copper price would reach $15,000 per ton by 2025. However, the copper market has repeatedly failed to meet expectations; last year, copper prices rose above $11,000 per ton but fell sharply after Chinese buyers exited the market.
As Trump threatens to impose copper tariffs, the market landscape has changed. Although tariffs have yet to be fully imposed by the US, domestic copper prices are already $1,400 per ton higher than in other regions, incentivizing traders to transport surplus copper to the US. Bintas claims these trading opportunities are unprecedented, stating: "The profit per ton is unparalleled."
He also pointed out that China, which accounts for more than half of global copper demand, is facing pressure from competition with the US market. The liquidity of American scrap copper has dried up due to tariff threats, further exacerbating the supply strain in the US market.
According to Macquarie estimates, around 500,000 tons of copper are being shipped to the United States, with most already en route. In comparison, the US typically imports 70,000 tons of copper per month. Macquarie itself has 85,000 to 90,000 tons of copper heading to the US, with some traders redirecting shipments originally destined for Asian customers to the US.
Global copper prices have already risen significantly, with prices on the London Metal Exchange up 12% this year, surpassing $9,855.50 per ton last Friday. Due to tariff threats, US copper futures on the New York Commodity Exchange are nearing historic highs. Although the global market shows signs of tight supply, it has yet to reach the extreme shortage situation predicted by Bintas.
Macquarie believes that global copper demand will exceed supply by 320,000 tons and expects inventory transfers to the US to deplete stocks elsewhere. Additionally, the drying up of US scrap copper exports is impacting the global copper market, with one-third of global copper output coming from scrap, highlighting an underappreciated market shock.
As demand for copper continues to grow, further increases in copper prices remain a possibility, despite concerns that a global economic slowdown could affect this forecast.
