Remarkably prevalent throughout the global economy, copper has always been a good predictor of economic growth. In fact, commodities traders and economists call it “Doc Copper” because it tends to forecast fairly accurately the health of the long-term global economy.
New All Time Price Highs
Copper prices are currently taking the spotlight in commodities markets because they just made new all-time highs in the United States. This most recent price strength is primarily because the threat of tariffs by President Trump has copper users buying ahead of possible tariff impositions, which in turn has caused the global price of copper to rise as well. Copper prices had already been in a long term uptrend because copper demand is consistently projected to rise faster than projected production for years to come. Unexpected problems with copper mines around the world began to accelerate the trend in rising copper prices last year, with prices establishing a record high in May of 2024. Copper prices have continued to climb to new highs again in March of 2025, turbocharged by more mining problems, tariff threats, and perhaps, most significantly, the macro changes in the global economy brought about by shifts in U.S. policies under the Trump Administration.
A Good Predictor Of Economic Expansion
Copper is used in everything from building materials, electricity generation, electronic products, automobiles, transportation equipment, industrial machinery, and a myriad of consumer products too numerous to even categorize.
Many of copper’s uses are for things that take large investments of time and capital to produce. Think data centers, power plants, semiconductor manufacturing facilities and automobile assembly plants, to name just a few. Therein lies the secret of copper’s ability to predict the long-term health of the economy. The things that create demand for copper require long periods of time for planning, development, and actual production. The lead time to plan, permit, build, and bring to operational capacity powerplants, auto, battery, building material and semiconductor manufacturing facilities, and other large scale copper consuming projects is substantial. Once business executives make these decisions and put them into motion, there is usually no stopping the economic momentum created by their implementation. It is because of this that copper markets are such good predictors of future economic activity and the general health of the overall economy.
Short Term Market Dips Versus Long Term Economic Growth
Copper markets look past any short term blips in markets (and the economy) to the effects created by long-term commitments of large scale businesses and industries. Many people, including this author, believe there will be short-term economic fallout from the pullback in government spending related to the activities of the Department of Government Efficiency (DOGE). It would not be surprising if a significant swoon in the stock market, and perhaps across all asset classes in general, happens in the not too distant future. But this would come as the result of cutbacks in government spending that are currently categorized by Trump Administration officials as either waste, fraud, or non-essential in nature. Taken at face value, that type of spending is superficial economic support, not the real economic support provided by enormous capital projects of the types mentioned above.
Copper markets seem to be signaling right now, by virtue of record high prices, that the new world order into which we are entering is good for copper consumption, and therefore good for the global economy as a whole.
India, China, Europe, Ukraine And The United States
A cursory look at just a few major shifts currently unfolding in the global economic and geopolitical landscape reveals enormous potential growth in copper demand. India has one of the fastest growing economies on the planet, and China is focused on reinvigorating its own domestic economy; both countries are huge copper users. European economies are about to implement massive investments in military spending in a reformulation of NATO capabilities, which will likely stimulate all sorts of economic growth, let alone copper demand, across both Europe and the entire globe. At some point there will be at least a partial post-war rebuild of Ukraine, which will also provide enormous economic stimulus – and a subsequent boost in copper demand. But perhaps the most significant of all factors could be the steadily multiplying number of announced massive capital commitments in the United States for the building of new manufacturing plants for semiconductors, cell phones, automobiles, Research and Development plants, etc., all in response to President Trump’s “America First” focus. These are long term, multi year projects that will create very real jobs, economic growth, and a huge increase in demand for copper.
If over the next decade only a fraction of anticipated future European NATO related spending, Ukraine postwar rebuilding, and current publicly announced commitments of large scale capital spending projects in the U.S. come to fruition, demand for copper will be enormous. All of this is driven by Trump Administration policies directly instigating geopolitical and economic changes that will be supportive to copper markets for years into the future. It’s probably true that some of those same policies may cause negative economic fallout in the near term, but such fallout is not really relevant to long term copper market fundamentals. Astute investors should be watching for opportunities in any upcoming market pullbacks created by DOGE mandated spending cuts and the uncertainties created by rapidly unfolding, and as yet still to be fully determined and implemented Trump Administration economic and foreign policies. Copper prices are clearly signaling the belief that any such market weakness will be short lived, and the global economy will come roaring back once everyone adjusts to the New World Order.
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