BNP Paribas warns of copper price ‘collapse’ as tariffs kick in

Copper prices are poised to “collapse” over the next few months as an ongoing global push to ship the metal to the US ahead of potential 25% tariffs winds down, French bank BNP Paribas warned on Friday.

Copper has been on the rise since the White House announced a sweeping investigation that may lead to copper tariffs on national security grounds.

Earlier this week, the industrial metal surged to a nine-month high above $10,000 a tonne in London. The most-traded New York copper contracts also set a new historic high, creating a large price gap across the Atlantic.

The rally was fuelled by concerns that efforts to frontload copper imports — before US President Donald Trump’s proposed tariffs take effect — would leave global supplies critically low. It is estimated that hundreds of thousands of tonnes of the metal are already on their way to the US.

However, the record-breaking rally has since lost steam after a Bloomberg report revealed that the tariff could arrive within weeks rather than months. At press time, the red metal is trading at $9,846.50 a tonne on the London Metal Exchange, down 0.8% for the day. US copper also dipped 0.1%.

A shortened timeline would leave little room to redirect more shipments to the US, according to BNP, who now forecasts copper prices will drop to $8,500 per tonne by the end of the second quarter as US demand slows.

BNP’s senior commodities strategist David Wilson said the bank expects the imposition of tariffs to end the current copper pricing dislocation, enabling the market to focus on the negative demand impact of US trade policies.

“We expect prices to collapse in Q2 2025,” Wilson said in a note.

The bank also revised down its forecast for global copper consumption, which is anticipated to increase by 2.3% this year versus 3.1% previously. It also projects a supply surplus of 460,000 tonnes, a sharp rise from an earlier forecast of 124,000 tonnes.

“It is simple economics; less global trade means less global growth,” Wilson wrote. “This is the key factor that prompts us to up our copper market surplus expectation.”

Still, not all analysts share BNP Paribas’ bearish outlook. Some believe copper’s long-term prospects remain strong as the global push toward electrification accelerates.

“A part of the copper story is China’s stimulus and recovery, the other part is tariffs. We could be seeing a boost in demand at a time when higher prices could restrict the supply side. The weaker dollar helps as well,” Kyle Rodda, a senior market analyst at Capital.com, noted.

(With files from Bloomberg)