Bank of America forecasts copper price above $10,000, iron ore price below $80 by 2025

The copper price remains strong due to high demand, constrained supply and increased investment in energy transition projects, BofA said.

“Manufacturing activity should stabilize as the Fed cuts rates, so we maintain our constructive copper view into 2025,” the analysts said.

Copper prices have risen 6% year-to-date in 2024, driven by tight mine supply and challenges in refining.

Read more: BHP warns AI boom would worsen copper shortage

Additionally, spending on energy infrastructure—especially grid expansion tied to decarbonization—has boosted demand. In China, grid investments have offset weaker demand from the housing sector, further supporting copper.

Iron ore outlook

In contrast, iron ore faces challenges from declining demand, especially in China’s property sector, where consumption dropped from 50% in 2010 to 20% in 2024 due to a government crackdown on speculative investments and a slowdown in housing construction.

Steel production has also declined, and although sectors like machinery have helped, it’s not enough to counter the construction downturn, according to BofA.

Negative steel mill margins in China have led to production cuts, while major exporters Australia and Brazil continue to increase output, worsening the supply glut.

“With a surplus of 190mt, or 7.5% of total supply expected for next year, this suggests that prices may fall below $80/t, to incentivize either the large miners to stop adding to supply or take some of the higher cost operations especially in China out of the market,” the analysts said.

Read more: Goldman Sachs cuts Q4 iron ore price forecast by $15/t on supply glut