The copper market has moved to surplus sooner than expected, according to analysts at Macquarie, and will remain there until 2026.

Prices are estimated to average $9,000/tonne for the rest of this quarter, recovering in the fourth quarter if visible stocks start to draw and macro-financial sentiment stabilises.

“This rally is likely to be short-lived, with prices falling back to a quarter average low of $8,000/t in 2026,” the analysts say. “From 2027, we expect prices to assume a sharper upward trajectory, with the potential for tight balances to push copper back up to a nominal $11,500/t by 2028.”

The rally in May was driven by investor sentiment, which is now dwindling, Kallanish understands. Yet market fundamentals are showing signs of improvement.

For example, China’s import arbitrage has reopened, import premiums have increased and visible global stocks have plateaued. 

Macquarie cut its forecast for Chinese demand growth this year to 1.2%, from 2.9% previously, mostly led by lower demand for grid-related copper.

The Australian financial services firm also estimates softer demand growth for the US, down from 2.5% to 0.5%, amid concerns over a possible recession. Similarly, it reduced its demand growth forecast from 1% to zero for Europe due to a loss of momentum in manufacturing PMIs (purchasing managers’ indices).

From next year, rate cuts are expected to lift economic activity in North America and Europe, which could see annual refined copper demand growth reaching 4% and 3.5%, respectively.

The upward trend could help China, where 2025 copper demand could rise by 2.9% driven by grid recovery.