Copper recorded its largest annual gain since 2009, driven by supply constraints and anticipation that demand, particularly for electrification, will exceed production. The red metal's price on the London Metal Exchange (LME) rallied 42% this year, making it the top performer among the exchange's six industrial metals.

Prices experienced a slight dip of 1.1% on Wednesday, the final trading day of 2025. Recent gains were also attributed to traders accelerating copper shipments to the United States in anticipation of potential tariffs. According to Natalie Scott-Gray, senior metals analyst at StoneX Financial Ltd., the expectation of future U.S. import tariffs on refined copper led to over 650,000 tons of metal entering the country, creating tightness outside of the U.S.

The potential for tariffs, stemming from President Trump's plan to revisit the issue of tariffs on primary copper in 2026, revived arbitrage trading that had previously impacted the market. This situation tightened availability even as demand in China, a key buyer, softened. The price spread related to this narrowed recently amidst a strong December rally on the LME.

The copper market's performance reflects broader trends in the global economy, particularly the increasing demand for metals essential to renewable energy technologies and electric vehicles. Copper's role in electrification makes it a crucial component in the transition to a low-carbon economy.

Currently, two-thirds of global visible copper stocks are held within the U.S., according to StoneX Financial Ltd. Market participants are closely monitoring policy decisions regarding tariffs and trade flows, as these factors are expected to significantly influence copper prices and availability in the coming year.