Copper price rally won’t last, demand destruction coming, says BofA’s Francisco Blanch

The recent surge in US copper prices may not last, according to Francisco Blanch, Head of Commodities & Derivatives Research at BofA Global Research.

Speaking to CNBC-TV18, Blanch warned that demand destruction is likely to follow the short-term spike triggered by fresh US tariffs. “If you’re an industrial buyer in the US, you’ve got to pay 50% more for copper. And you’re becoming less competitive,” he said.

US copper futures have surged after President Donald Trump announced a 50% tariff on the metal. While prices have soared in the US, the London and Shanghai exchanges have not seen the same reaction. “We were bullish on US copper and advising people to be long,” Blanch said. “But I don’t think anyone expected a 50% premium—it was very, very high.”

He explained that copper, along with other commodities like gold, has been flowing into the US ahead of the tariff deadline, continuing a pattern seen earlier with aluminium and steel. However, he does not expect new refineries to be built in response to the tariff-induced price differential, citing the near-zero margins between copper ore and refined copper.

On gold, Blanch struck a cautiously optimistic note. While jewellery demand is down 20% globally, central bank buying has provided critical support. “We’ve seen more than a doubling—tripling, in some cases—of central bank gold purchases,” he noted, adding that this public sector buying has helped gold prices edge closer to $3,500. He expects gold could hit $4,000 per ounce in the next 12 months if investor demand rises further.

Blanch was more bullish on other precious metals. He sees silver climbing to $40 per ounce and has a $1,400 target for platinum. “Silver and platinum are our favourite metals in the precious space right now,” he said. He added that even a small shift in jewellery demand from gold to platinum could significantly tighten supply, given how small the platinum market is.

While the broader precious metals outlook remains strong, Blanch made it clear that not all metals are equally favoured. “We don’t like palladium as much… we think platinum will outperform palladium throughout the next few months,” he said.

Watch accompanying video for entire conversation.