METALS-Copper up but holds in tight range ahead of expected 2025 volatility

Updates with official prices

By Polina Devitt

LONDON, Dec 24 (Reuters) - Copper prices rose on Tuesday on revived hopes for additional fiscal stimulus in top consumer China in thin pre-Christmas activity, and were on track for a 4.6% gain in 2024 ahead of expected volatility in 2025.

Three-month copper on the London Metal Exchange (LME) CMCU3 added 0.5% to $8,960 per metric ton in official open-outcry trading.

Copper, used in power and construction, is down 19% since May when a fund buying frenzy drove the price to a record high above $11,100, as the unwinding of bullish investor positioning returned the focus to the global market surplus.

A strong dollar and the looming threat of import tariffs from U.S. President-elect Donald Trump - which could trigger a trade war and hit economic growth and demand around the world - have kept copper in a tight price range since mid-November.

"Things will certainly heat up going into January as the new (Trump) administration takes office. With many of its policies still very much a 'work-in-progress', market volatility should be considerably higher," said Marex consultant Edward Meir.

In China healthy physical buying has been providing support to copper in recent weeks, as indicated by declining metal inventories in warehouses monitored by the Shanghai Futures Exchange and growth in the Yangshan copper premium SMM-CUYP-CN, currently at its highest since mid-October.

Demand prospects in the world's second largest economy got further support on Tuesday after sources told Reuters that Beijing planned to issue $411 billion worth of special treasury bonds next year.

However, absent faster global growth, a larger market surplus may push average copper prices to $8,650 in 2025 and $8,300 in 2026 before they rebound in 2027, according to analysts at Macquarie.

In other LME metals, aluminium CMAl3 gained 1.7% to $2,570 a ton in official activity after hitting a one-week high of $2,575.5 due to a 22% fall in available LME stocks.

Zinc CMZN3 climbed 1.9% to $3,041, lead CMPB3 was steady at $1,986, tin CMSN3 was up 0.6% at $28,700, and nickel CMNI3 increased 1.2% to $15,480.

(Reporting by Polina Devitt; Additional reporting by Violet Li; Editing by Tasim Zahid and Jan Harvey)

((polina.devitt@thomsonreuters.com; Reuters Messaging: polina.devitt.thomsonreuters.com@reuters.net))

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