In 2025, the global copper market will push prices to unprecedented historical heights - LME copper futures exceeded US$12,000 per ton, and the main Shanghai copper contract exceeded the 1,000,000 mark, with an annual increase of more than 30%. Behind the surge in copper prices is a typical manifestation of financial attributes surpassing commodity attributes. The expected rate cut by the Federal Reserve triggered a weakening of the U.S. dollar. The global green energy transformation and the construction of AI data centers gave rise to narratives of a surge in downstream demand for copper, and a large amount of risk funds poured into the copper market.

Global copper mines are in short supply. According to the latest updated production guidance of the top 20 copper mining companies, there is basically no mine-end increase in 2025. Judging from the actual production this year, the increase in copper production in the first three quarters was mainly provided by Chinese copper companies. Among them, Zijin Mining’s copper production increased by approximately 5% year-on-year, Luoyang Molybdenum’s output increased by 14% year-on-year, and Minmetals Resources increased by approximately 42% year-on-year. The full-year production guidance of these 20 companies accounts for more than 70% of the overall primary copper production. Based on the production in the first three quarters of 2025, the average production growth rate of the top 20 copper companies is about -1.2%. The supply-side disturbance in the third quarter has increased significantly compared with the second quarter. According to each company's guidelines. The relative increase in 2026 is still low, about 1.6%, and there is greater instability in mines with early supply disruptions. Since 2025, safety accidents and natural disasters have occurred successively in global core production areas such as Chile's El Teniente copper mine and Indonesia's Grasberg copper mine, directly impacting the supply of copper mines. The Grasberg copper mine in Indonesia had almost no output in the fourth quarter, and the impact will continue until next year. Coupled with supply disruptions from some mines in the Democratic Republic of the Congo, global copper mine production fell year-on-year. JPMorgan Chase predicts that global copper mine supply growth will be basically flat in 2025, and the growth rate in 2026 will be only 1.4%, a decrease of about 500,000 tons from the forecast at the beginning of the year. Structural problems such as insufficient investment in the mine and declining grades further limit supply elasticity. Many countries, led by the United States, quickly included copper in their list of critical minerals and launched large-scale strategic stockpiling. The intervention of this non-market factor directly led to structural shortages in other regions of the world except the United States. The expectation that the United States will classify copper as a critical mineral and may impose tariffs has triggered a siphon effect - a large amount of copper has been shipped to U.S. warehouses in advance, causing extreme tightness in spot goods in other parts of the world. The copper inventory of the New York Mercantile Exchange (COMEX) has surged 300% from the end of 2024, exceeding 400,000 tons. However, the spot supply in Asia and other regions has tightened, further exacerbating the global supply and demand imbalance.

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Although copper demand is still partly limited by the weak performance of traditional real estate and other industries in recent years, the AI ​​boom has driven a surge in computing power demand, resulting in a steady increase in copper demand. Demand from AI computing power, global energy facility reconstruction and emerging technology fields are forming a structural long-term demand increase, reshaping the long-term supply and demand pattern of the copper market. Global refined copper consumption will be 27.33 million tons in 2024, of which China's total refined copper consumption in 2024 will be 15.95 million tons. Huge investment in the AI ​​industry has become a new engine for copper demand. A very large-scale AI data center can consume up to 50,000 tons of copper. Microsoft's Chicago data center uses 2,177 tons of copper. It is expected that by 2050, the demand for copper in global AI data centers will increase sixfold. At the same time, demand in the new energy field remains strong. The installed copper consumption of wind power and photovoltaic units is 2-5 times that of traditional energy sources. The copper consumption of electric vehicles is four times that of fuel vehicles. Together with the investment in power grid transformation in major economies, these together form a solid support for copper demand.

S&P expects growth in artificial intelligence and defense to increase global copper demand by 50% by 2040, but without more recycling and mining, supply is expected to be short of more than 1,000 tons per year. S&P said that while the electric vehicle industry has driven up copper demand in the past decade, the artificial intelligence, defense and robotics industries will need more copper in the next 14 years, while traditional consumers also have strong demand for air conditioners and other copper-intensive appliances. The report predicts that global demand will reach 42 million tons per year by 2040, much higher than 28 million tons in 2025. But without new sources of supply, nearly a quarter of demand may not be met.

The International Copper Research Organization predicts that the global refined copper market may have a supply gap of approximately 150,000 tons in 2026. This forecast is based on two key assumptions: first, emerging demand areas can maintain rapid growth; second, copper mine supply growth continues to be sluggish. JP Morgan predicts that copper prices will hit US$12,500/ton in the second quarter of 2026, with the annual average price being approximately US$12,075/ton. Citigroup is more optimistic. In a bull market scenario, coupled with the weakening of the US dollar and expectations of an interest rate cut by the Federal Reserve, copper prices may rush towards US$15,000/ton. UBS is optimistic that it will reach US$13,000/ton by the end of 2026, and CITIC Securities also believes that the LME copper price center will exceed US$12,000/ton next year. Taken together, the bottom of copper prices is solid due to supply rigidity, while the top is subject to weak spot prices and potential demand destruction. Therefore, it is expected that the core operating range of LME copper prices will rise to 11,500-13,500 US dollars/ton in 2026, and the main force of Shanghai copper is expected to steadily consolidate in the 90,000-108,000 yuan/ton area.