JPMorgan (NYSE:JPM) expects base metals to decline in the near term in early 2025 due to potential U.S. tariffs on Chinese goods, but expects a rebound later in the year, supported by stronger Chinese economic stimulus and improved valuations.
“While base metals price expectations have been dampened by these tariff concerns, there is a favorable risk/return scenario for base metals investment in the coming quarters,” the analysts said.
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JPMorgan's Greg Shearer has cut base metals price forecasts, citing concerns over tariffs and a weaker Chinese yuan.
However, a V-shaped recovery is expected starting in Q2, with copper prices reaching $10,400/mt by year-end and aluminium rising to $2,850/mt.
Zinc prices are expected to remain stable, while nickel may remain under pressure at $16,000/mt due to oversupply.
For precious metals, JPMorgan expects gold to rise to $3,000 an ounce and silver to $38 an ounce by late 2025 as markets stabilize. Platinum is expected to rise to $1,200 an ounce, driven by supply constraints.
In the iron ore market, JPMorgan highlighted improving fundamentals with a recovery in Chinese steel production and falling inventories. Analysts expect iron ore prices to reach $100 per tonne in 2025, supported by seasonal factors and strong Chinese steel demand, although in the long term prices will decline to $80 per tonne.
Risks to the outlook include potential U.S. tariffs, Chinese stimulus measures, and increased supply from major producers such as Vale and Onslow.
