Copper Micro Dec '25 (QLZ25)

Description

The word copper comes from the name of the Mediterranean island of Cyprus, a major source of the metal. Dating back more than 10,000 years, copper is the oldest metal used by humans. From the Pyramid of Cheops in Egypt, archeologists recovered a portion of a water plumbing system with copper tubing in serviceable condition after more than 5,000 years.

Copper is one of the most widely used industrial metals because it is an excellent conductor of electricity, highly corrosion-resistant, and very ductile. It is also used to produce the alloys of brass (a copper-zinc alloy) and bronze (a copper-tin alloy), both of which are far harder and stronger than pure copper. Electrical uses account for about 75% of total copper use, and building construction is the single largest market (the average US home contains 400 pounds of copper). Copper is biostatic, meaning that bacteria will not grow on its surface. Therefore, copper is used in air-conditioning systems, food processing surfaces, and doorknobs to prevent the spread of disease.

Copper futures and options are traded on the CME Group and the London Metal Exchange (LME). Copper futures are traded on the Shanghai Futures Exchange. The CME copper futures contract calls for the delivery of 25,000 pounds of Grade 1 electrolytic copper and is priced in cents per pound.

Prices - CME copper futures (Barchart.com symbol HG) posted the 2025 low in January at $3.9745 per pound. Concerns that President Trump's tariffs would curb demand for industrial metals weighed on copper prices. However, copper prices turned higher in March and rallied to a record high as the threat of tariffs pushed the spread between Comex and LME copper prices to an all-time high, prompting traders to shift copper into the US to front-run any potential tariffs. Copper prices dipped briefly in April after President Trump announced a 90-day pause on tariffs. Copper prices then rallied to a record high of $5.8950 per pound in July after President Trump said he would impose 50% tariffs on copper imports on August 1. However, copper prices plunged in late July to $4.3235 per pound after President Trump said he would exempt refined copper imports from tariffs. Copper prices trended higher into year-end due to US economic strength as Q3 GDP grew +4.4% (q/q annualized), the most in two years. Copper prices finished 2025 sharply higher by +41.2% yr/yr at $5.6300 per pound.

Supply - World production of copper in 2025 remained unchanged yr/yr at a record 23.000 million metric tons. The largest producer of copper was Chile, with 23.0% of the world's production, followed by Congo with 13.9%, Peru with 11.7%, and the US with 4.3%. US production of total new copper in 2025 fell by -10.4% yr/yr to 79,000 metric tons, far below the record US production level of 2.140 million metric tons seen in 1998.

Demand - US consumption of refined copper in 2025 rose by +7.6% yr/yr to 1.700 million metric tons. In 2021, the primary users of copper in the US were wire rod mills, followed by brass mills.

Trade - US exports of refined copper in 2024 rose by +108.7% yr/yr to 71,860 metric tons. US imports of copper in 2024 rose by +17.1% yr/yr to 903,200 metric tons, below the record high of 1.070 million metric tons in 2006.

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