BofA’s Copper Forecast: Is $15,000/Tonne Possible?

Copper, often called “Dr. Copper” for its ability to predict economic trends, is at the center of a heated debate: Can it reach $15,000 per tonne? Bank of America (BofA) has thrown its hat in the ring with a bullish forecast, but what factors support this ambitious target, and what could stand in the way? With copper demand expected to dramatically outstrip supply within the decade, according to the International Energy Agency (IEA), understanding the forces at play is crucial for investors and industries alike.

The Bullish Case for Copper: A Perfect Storm?

BofA’s projection isn’t just plucked from thin air. It’s rooted in a confluence of factors impacting both the supply and demand sides of the copper equation.

Mine Supply Disruptions: Several major copper mines worldwide are facing operational challenges. These include Grasberg in Indonesia, El Teniente in Chile, and Kamoa-Kakula in the Democratic Republic of Congo. Disruptions at these key sites can significantly impact global copper availability. For example, Grasberg, has faced production setbacks due to a mud rush that tragically killed two workers.
Declining Ore Grades: Existing copper mines are experiencing declining copper production per metric ton of ore. This means it’s becoming more difficult and expensive to extract the same amount of copper. Since 1991, average ore grades have fallen by 40%.
Resilient Demand: Despite economic uncertainties, copper demand remains robust, particularly in China, where rising grid investments tied to renewable energy and AI-related infrastructure are driving consumption. Europe is also showing early signs of demand recovery.
Low Inventories: Stockpiles at the London Metal Exchange (LME) remain exceptionally low, raising the risk of short squeezes if consumption accelerates further. Spare tonnages have already been diverted to the US, leaving the market vulnerable to sharp price spikes.
Energy Transition: The global shift towards renewable energy and electric vehicles (EVs) is a major demand driver. Electric vehicles require significantly more copper than traditional gasoline-powered cars. Conservative estimates suggest annual demand increases of 3-5% from transportation electrification alone.
AI and Data Centers: The rapid expansion of data centers and AI infrastructure is creating additional demand pressures, as these facilities require extensive copper installations for power distribution and cooling systems.

BofA’s analysts expect copper to average $11,313 per tonne in 2026 and $13,501 in 2027, with a potential peak of $15,000 per tonne. This forecast hinges on the discrepancy between mine production and sustained demand in electrification, grid expansion, and industry.

Headwinds and Alternative Perspectives: Not So Fast?

While the bullish narrative is compelling, it’s essential to consider factors that could temper copper’s rise.

Economic Slowdown: A significant global economic slowdown could dampen demand for copper, impacting prices.
Increased Supply: While current supply is constrained, new projects and expansions could eventually bring more copper to the market, easing the pressure on prices.
Inventory Normalization: Goldman Sachs, while acknowledging copper’s potential, projects consolidation within a $10,000 to $11,000 per metric ton range throughout 2025. Their analysis suggests that market surplus conditions will emerge in 2026.
Tariff Impacts: Trade tensions and tariffs can create volatility and impact demand, as seen in early July 2025 when the announcement of a 50 percent tariff on copper imports created extreme volatility in the US copper market.
Substitution: High copper prices could incentivize the use of alternative materials in some applications.

J.P. Morgan Global Research maintains a cautious outlook for copper prices in the coming months, projecting LME copper prices to slide toward $9,100/metric tonne in the third quarter of 2025 before stabilizing around $9,350/mt in the fourth quarter.

The Role of Scrap Copper

It’s also important to consider the role of scrap copper. As the price of mined copper increases, so does the incentive to recycle scrap copper. Scrap supply is expected to increase from around one third of global copper today to around 40% by 2035, and reach around a half of total copper consumption by 2050. However, even with this increasing use of copper scrap, more primary, or mined, copper will still be required.

Investment and Strategic Considerations

The copper market presents both opportunities and risks. For investors, understanding the interplay of supply and demand dynamics, economic indicators, and geopolitical factors is crucial for making informed decisions.

Secure Supply: Companies are encouraged to secure direct supply through long-term agreements or micro-level investments with mines.
Small-Scale Mining: Investing in small-scale mining operations can bring copper to market faster.
Sustainable Mining: Promoting sustainable mining practices is essential for long-term supply security.

Navigating the Copper Landscape

The question of whether copper can reach $15,000/tonne is complex and depends on how various factors unfold. While BofA’s forecast is optimistic, it’s crucial to consider alternative perspectives and potential headwinds. The copper market is expected to remain volatile, influenced by supply disruptions, demand growth, and macroeconomic conditions.

Disclaimer: This blog post is for informational purposes only and does not constitute financial advice. Consult with a qualified financial advisor before making any investment decisions.