World Bank lifts copper price outlook by 18%

The World Bank has raised its copper price outlook for 2027 by 18%, predicting the metal to trade at around $13,000 per tonne, or $5.90 per pound. This new estimate, released in October, is 1.5% below the bank's current projection for the current year. Deputy Chief Economist Ayhan Kose highlighted that several shocks are impacting commodity markets, including higher energy costs and trade disruptions, which threaten to exacerbate inflation, food insecurity, and economic growth.

The outlook underscores sustained demand for new copper supply alongside higher costs and uneven recovery across other commodities. The bank projects its metals and minerals index, which includes base metals and iron ore but excludes precious metals, to rise by 25% this year before easing by 3.3% in 2027. Despite this decline, the index would remain 16% above its 2021 peak.

The forecast is based on calendar-year averages, utilizing information available up to October 14. The long development timelines of mines contribute to sustained elevated prices, as investment has shifted towards industries using more base metals. Copper's recent price gains have not been solely driven by stronger consumption; global demand slightly decreased in the first half of the year, while mine disruptions and refined metal accumulation in U.S. warehouses have tightened availability elsewhere.

Uncertainty surrounding potential U.S. import tariffs creates a premium for copper traded on the Comex, drawing shipments toward the United States. Mine supply growth is expected to remain subdued, with Indonesia facing weather-related disruptions and Chile experiencing operational constraints and declining grades. Demand for copper is anticipated to strengthen in 2027-2028 due to investments in electricity networks, data centers, and electric vehicles.

Trade policy also poses a constraint, with the Democratic Republic of Congo banning copper concentrate exports in August to promote domestic processing, though exemptions may limit the immediate impact. The bank observed 147 restrictive measures affecting critical minerals as of September, compared to 63 easing measures. Copper demand is expected to rise due to electrification, while weak construction weighs on iron ore, and high silver prices encourage manufacturers to use less of it.

The bank anticipates its metals and minerals index to increase by 25% this year before easing by 3.3% in 2027, still standing 16% above its 2021 peak.