Commodities
Copper to be key driver of price gains among industrial metals in 2025: UBS
Investing.com — is poised to emerge as the standout performer among industrial metals in 2025, driven by a combination of supply constraints and improving global economic conditions, as per analysts at UBS Global Research.
Following a challenging year in 2024, characterized by uneven price movements across base metals, copper is expected to benefit from supply tightness and a rebound in manufacturing demand.
UBS projects that copper prices could reach $11,000 per metric ton by the end of 2025, fueled by a deficit in global market balances.
Refined copper production growth is forecast to remain subdued due to low treatment and refining charges, as well as tight scrap availability.
Additionally, while new smelter capacity in countries such as China and Indonesia is ramping up, the overall supply increase is anticipated to fall short of demand growth, which UBS estimates at 3.4% for the year.
Global economic recovery, particularly in the latter half of 2025, is expected to play a significant role in copper’s price momentum.
UBS flags that manufacturing activity in the United States and other advanced economies is likely to improve, spurred by anticipated interest rate cuts and renewed fiscal stimulus in China.
These factors are expected to offset some of the challenges posed by ongoing trade tensions and a slow start to the year.
China, which accounts for over half of global copper demand, remains a key factor in the market.
While the country faces external pressures from U.S. trade policies and internal headwinds in its property sector, UBS analysts suggest that targeted stimulus measures, particularly those aimed at boosting household consumption, will provide critical support to copper demand.
Compared to other industrial metals, copper’s outlook is notably stronger. While zinc and aluminum are expected to post gains as well, their performance is likely to lag behind copper.
Meanwhile, nickel and lead are projected to remain under pressure due to surpluses and weak demand fundamentals.
The robust demand for copper also stems from its integral role in the transition to a low-carbon economy.
Its extensive use in renewable energy infrastructure and electric vehicles continues to underpin long-term demand growth, making it a key beneficiary of structural shifts in the global economy.
Despite the positive outlook, UBS warns of potential risks to the forecast. A significant deterioration in global economic conditions or insufficient policy support could weigh on copper prices.
However, with a market deficit and tight supply dynamics, any pullbacks are expected to be temporary, solidifying copper’s position as the likely driver of price gains among industrial metals in 2025.
Investing.com– Oil prices steadied Thursday as traders digested data showing an unexpected increase in US product inventories, while weak economic data from top importer China weighed.
At 05:25 ET (10:25 GMT), expiring in March gained 0.1% to $76.25 a barrel, while rose 0.1% to $73.37 a barrel.
The crude benchmarks had slumped more than 1% on Wednesday, but trading ranges, and volumes, are likely to be limited throughout Thursday with the US market closed to honor former President Jimmy Carter, ahead of a state funeral later in the session.
China inflation muted in December
Chinese inflation, as measured by the , remained unchanged in December, while the shrank for a 27th consecutive month, data showed on Thursday.
The reading pointed to limited improvement in China’s prolonged disinflationary trend, even as the government doled out its most aggressive round of stimulus measures yet through late-2024.
China is the world’s biggest oil importer, and has been a key source of anxiety for crude markets. Traders fear that weak economic growth in the country will eat into oil demand.
The country is also facing potential economic headwinds from the incoming Donald Trump administration in the US, as Trump has vowed to impose steep trade tariffs on Beijing.
US oil product inventories rise sharply
U.S. gasoline and distillate inventories grew substantially more than expected in the week to January 3, government data showed on Wednesday.
inventories grew 6.3 million barrels against expectations of 0.5 mb, while grew 6.1 mb on expectations of 0.5 mb.
Overall crude also shrank less than expected, at 0.96 mb, against expectations of 1.8 mb.
The build in product inventories marked an eighth straight week of outsized product builds, and spurred concerns that demand in the world’s biggest fuel consumer was cooling.
While cold weather in the country spurred some demand for heating, it also disrupted holiday travel in several areas.
EIA data also showed that US imports from Canada rose last week to the highest on record, ahead of incoming U.S. president Donald Trump’s plans to levy a 25% tariff on Canadian imports.
Canada has been the top source of U.S. oil imports for many years, and supplied more than half of the total U.S. crude imports in 2023.
Strength in the also weighed on crude prices, as the greenback shot back up to more than two-year highs on hawkish signals from the Federal Reserve.
A strong dollar pressures oil demand by making crude more expensive for international buyers.
(Ambar Warrick contributed to this article.)
Investing.com – President-elect Donald Trump’s plan to implement sweeping import tariffs during his second term in the White House is potentially the “most bearish” policy development for the energy sector this year, according to analysts at RBC Capital Markets.
Trump, who is set to come to power in less than two weeks, has vowed to impose tariffs of as much as 10% on global imports into the US and 60% on items coming from China. He has also pledged to slap a 25% surcharge on products from Canada and Mexico.
Economists have flagged that the proposal would not only rattle global trade activity, but also threaten to reignite inflationary pressures and spark possible retaliation.
The uncertainty in markets was heightened on Wednesday after CNN reported that Trump is mulling declaring a national economic emergency in order to provide the legal underpinning for the tariffs. Earlier this week, Trump also denied a separate report that his team was mulling scaling back the levies to cover only critical goods.
In a note to clients on Thursday, analysts at RBC led by Helima Croft said that while the ultimate scope of the tariffs remains unclear, the headline duties on China could soften demand in the country and place downward pressure on oil prices. China is the world’s largest crude importer.
Business leaders with significant ties to China may advise Trump to stay away from instituting strict tariffs on the country, Croft predicted.
“We have also heard a view in Washington that President Trump could be amenable to a deal with China if Beijing offered to make large headline purchases of US goods, such as aircraft or even US [liquefied natural gas] imports,” Croft wrote.
“Beijing could also potentially seek to trade a reduction in Iranian crude imports for a tariff reprieve.”
However, Croft flagged that the overall market effect of the tariffs is still “challenging to forecast” because the Trump administration — unlike a prior round of trade tensions in 2018 — will have to weight the impact of the policies with broader macroeconomic worries “still front of mind for many in Washington”.
(Reuters contributed reporting.)
Investing.com– Gold prices edged higher Thursday, continuing the recent gains, as heightened uncertainty over a hawkish Federal Reserve and President-elect Donald Trump’s plan for trade tariffs fueled some safe haven demand.
At 06:15 ET (11:15 GMT), {68|Spot gold}} rose 0.4% to $2,683.84 an ounce, while expiring in February rose 0.3% to $2,668.60 an ounce.
Trading activity is likely to be limited Thursday, with US traders on holiday to honor former President Jimmy Carter, with a state funeral due later in the session.
Safe haven demand on economic uncertainty
Bullion prices benefited from some safe haven demand this week, as uncertainty over Trump’s trade and immigration policies dented risk appetite.
A CNN report said Trump could declare a national economic emergency to legally justify his plans to impose universal trade tariffs.
Concerns over Trump’s policies also came into focus after the of the Fed’s December meeting showed policymakers expressing some concerns over sticky inflation.
Specifically, Fed officials were growing concerned that Trump’s expansionary and protectionist policies could underpin inflation in the long term.
The minutes also largely reiterated the Fed’s plans to cut interest rates at a slower pace in 2025, after the central bank effectively halved its projected rate cuts to two from four in 2025.
Treasury yields shot up after the Fed’s minutes, as did the dollar.
Higher for longer rates bode poorly for non-yielding assets such as metals, given that they increase the opportunity cost of investing in the sector.
Other precious metals were edged higher Thursday. fell 0.1% to $983.85 an ounce, while rose 0.8% to $30.930 an ounce.
Copper rises as weak China inflation fuels stimulus hopes
Benchmark on the London Metal Exchange rose 0.7% to $9,093.0 a ton, while March rose 1.2% to $4.3115 a pound.
Chinese were flat in December, while shrank for a 27th consecutive month, indicating little improvement in disinflation.
Inflation remained weak even as Beijing doled out its most aggressive round of stimulus measures through late-2024.
But Thursday’s inflation data fueled increased bets that Beijing will do more to shore up Chinese growth, especially on the fiscal front.
(Ambar Warrick contributed to this article.)
Among industrial metals, copper prices firmed as weak inflation data from top importer China spurred bets on more stimulus measures from Beijing.
But metal markets remained under pressure from strength in the dollar, which came back in sight of over two-year highs on hawkish signals from the Fed.
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