BofA sees strong 2025 for copper, while iron ore prices to drift lower

Analysts at Bank of America (BofA) Securities project the copper price will rise above US$10,000 per tonne or US$4.54 per lb. by 2025, while iron ore prices will fall below US$80 per tonne, driven by a supply surplus and declining demand from China’s steel sector.

The current copper price is US$9,281.45 per tonne, or US$4.21 per lb., while iron ore is just under US$93 per tonne, translating to a rise of 7.7% for copper and a decline of 14% for iron ore.

Copper remains strong due to high demand, constrained supply, and increased investment in energy transition projects.

Bank of America analysts maintain a positive outlook, expecting prices to stay elevated with a likely Fed rate cut this week.

“Manufacturing activity should stabilize as the Fed cuts rates, so we maintain our constructive copper view into 2025,” the analysts said.

Copper prices have risen 6% year-to-date, driven by tight mine supply and challenges in refining.

Additionally, spending on energy infrastructure — especially grid expansion tied to decarbonization — has boosted demand. In China, grid investments have offset weaker demand from the housing sector, further supporting copper.

Iron ore outlook

In contrast, iron ore faces challenges from declining demand, especially in China’s property sector. Iron ore consumption dropped from 50% of total Chinese copper demand in 2010 to 20% this year following a government crackdown on speculative investments and a slowdown in housing construction.

Steel production has also declined, and although sectors like machinery have helped, it’s not enough to counter the construction downturn, according to BofA

Negative steel mill margins in China have led to production cuts, while major exporters Australia and Brazil continue to increase output, worsening the supply glut.

“With a surplus of 190 million tonnes, or 7.5% of total supply expected for next year, this suggests that prices may fall below $80/t, to incentivize either the large miners to stop adding to supply or take some of the higher cost operations especially in China out of the market,” the analysts said.