Copper prices were volatile during Q3, swinging to record highs of US$5.81 per pound on the COMEX.
The movement was fueled by traders importing copper products into the US following President Donald Trump’s tariff announcement on July 8. However, prices fell in early August as the White House clarified its plans.
Since then, copper has reverted to being driven largely by its usual supply/demand fundamentals.
What happened to the copper price in Q3?
Copper prices opened the quarter at US$5.05, but quickly gained strength on the back of tariff fears, rising to US$5.65 on July 8. With little information about specifics, prices continued to rise — as mentioned, COMEX copper hit an all-time high of US$5.81 on July 23, but quickly plummeted to US$4.40 per pound by July 31.
At the start of August, copper prices saw further declines, reaching a quarterly low of US$4.37 on August 5. From there, prices hovered around the US$4.40 to US$4.50 range for the rest of the month and into September.
Copper price, July 1 to October 17, 2025.
Chart via TradingEconomics.
At the start of September, copper experienced some upward momentum, but really took off in the middle of the month as supply fundamentals took over. By the end of September, prices were closing back in on US$5.
Since the end of the quarter, the copper market has continued to gain strength, with prices breaking through US$5 on October 3 and rising to US$5.11 on October 9.
US copper tariffs stoke price volatility
The big story to start the quarter was the Trump administration’s copper tariff announcement on July 8.
The news came after months of speculation following the government’s February launch of an investigation into how tariffs could be used to bolster national security under Section 232 of the Trade Expansion Act.
Copper market participants were caught off guard by the timing, as some had expected the tariffs to come later in the year, and at a lower rate than the announced 50 percent. Traders began importing copper into the US from abroad ahead of the implementation of the tariffs, and the increased volume drove prices for the metal to record highs by the end of the month; it also created a significant disparity between the COMEX and the London Metal Exchange (LME).
“The announcement of a 50 percent tariff on copper imports in early July created extreme volatility in the US copper market, triggering a surge in physical shipments into the country as buyers rushed to get ahead of the duty. This buying drove COMEX futures sharply higher and pushed the US premium over LME prices to an unprecedented 30 percent.’
White explained that during a copper short squeeze on the COMEX in 2024, copper premiums peaked at 8 percent; he also noted that the five year average for the COMEX-LME disparity is near parity at 0.5 percent.
Ultimately, copper tariffs were only applied to unrefined copper, as well as semi-finished and copper-intensive derivatives, such as pipe fittings, cables, connectors and electrical components.
Refined copper tariffs will be phased in at 15 percent in 2027, and 30 percent in 2028. The move essentially pulled the rug out from under traders, causing COMEX prices to plummet by nearly 25 percent.
White stated that with the tariff situation cleared up, copper prices once again reflected the underlying supply and demand fundamentals of low inventories and high demand resulting from the energy transition.
“These structural forces pushed copper prices internationally higher overall for the quarter, despite the mid-summer volatility. The tariff episode reinforced copper’s strategic importance and highlighted the fragility of global supply chains, factors that may strengthen the case for higher prices going forward,” he said.
Copper faces supply-side disruptions
According to the International Copper Study Group’s copper market forecast, released on October 7, refined copper is expected to record a 178,000 metric ton surplus in 2025, significantly lower than the 209,000 metric ton surplus predicted in April. However, the group expects a 150,000 metric ton deficit in 2026.
The reason for the group’s downward revision is supply disruptions at Ivanhoe Mines’ (TSX:IVN,OTCQX:IVPAF) Kamoa-Kakula operation in the Democratic Republic of Congo, and at Freeport-McMoRan’s (NYSE:FCX) Grasberg mine in Indonesia. The assets are two of the world’s largest copper mines.
Kamoa-Kakula was temporarily shut down in May following a seismic event at the mine. While some operations began to ramp up again in June, Ivanhoe has revised its midpoint guidance down to 395,000 metric tons for 2025 after initially expecting 550,000 metric tons; it has also withdrawn the 600,000 metric tons expected in 2026.
At Grasberg, a liquid material ingress in early September killed seven workers and forced the suspension of operations. In a release on September 24, Freeport said consolidated copper sales across its operations will decline by 4 percent during Q3, but was unable to provide estimates for the fourth quarter.
The Grasberg site encompasses several underground mines: the Grasberg block cave, the Deep Mill Level Zone (DMLZ) and Big Gossan. DMLZ and Big Gossan were not affected, and could restart production in the fourth quarter.
However, according to Freeport, a preliminary assessment indicates a delayed restart of operations at the Grasberg block cave, resulting in the deferral of significant production in the near term. A ramp up in this area is not anticipated to begin until the first half of 2026, with the mine potentially returning to full production in 2027.
“This single event has pushed 2025 mine disruptions to 6 percent of global supply, above the historical average of 5 percent, and turned a near-balanced market into a clear deficit,’ White said.
‘With inventories already at multi-year lows and scrap unable to fully bridge the gap, the supply side offers little cushion. This tightening dynamic suggests higher prices may be necessary to incentivize new projects.’
Copper price forecast for 2025
Although some headwinds remain, primarily stemming from a worsening trade standoff between the US and China, copper’s future is likely tied to its fundamental supply and demand dynamics.
With little new supply scheduled to come online in the near term, this should signal more support for pricing as demand continues to grow from the energy transition and key sectors, such as artificial intelligence and data centers.
“On the demand side, copper’s growth drivers remain firmly in place. Electrification, grid modernization, artificial intelligence and data center buildouts and defense spending continue accelerating, making copper less tied to broad GDP growth and more linked to strategic sectors. These trends, combined with a deepening supply deficit, reinforce the structural bull case for copper,” White explained. He also suggested that any further disruptions will only add tailwinds to the copper price, benefiting producers and investors alike.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
