According to the latest copper market report by ING Groep NV, the global copper market in 2025 is experiencing a supply-driven "tight balance," with price floors raised above $11,000 per ton. However, further upward momentum hinges on Chinese demand.
This year, mining disruptions—including accidents, floods, and equipment failures—have piled up. Indonesia's Grasberg mine declared force majeure due to a landslide in its main area, delaying 4% of global production until 2027. The Kamoa-Kakula mine in the Democratic Republic of Congo was flooded in May, while Chile's century-old El Teniente mine suffered an underground accident in July. Compounded by declining ore grades in Chile, global mine supply has been hit by a chain reaction, prompting ING to revise the total supply gap for 2025-2026 upward to 800,000 tons, with 600,000 tons of refined copper shortages concentrated in 2026.
The supply crunch is only half the story; trade flow shifts dominate the second half. Former U.S. President Trump's threat of copper tariffs earlier this year triggered a rush among traders to ship refined copper to the U.S. ahead of potential duties. U.S. refined copper imports surged over 50% year-on-year from January to August, driving COMEX inventories up 300% to a record 400,000 tons and inflating U.S. premiums to $2,500 per ton. Meanwhile, LME and SHFE inventories dwindled, leaving global observable stocks (excluding the U.S.) at under 500,000 tons—a 2.5-year low.
ING warns that if the U.S. imposes a 15% tariff as proposed in June 2026, this price divergence could widen further. Conversely, if Trump grants another exemption, the massive U.S. copper stockpile could flood back into global markets, collapsing COMEX premiums and flipping the global balance from deficit to surplus.
Demand remains equally fraught. China's property slowdown continues to drag on construction-related copper demand, but power grids, renewable energy installations, EVs, air conditioners, and washing machines have posted double-digit growth this year, keeping apparent demand in positive territory. However, high prices are spooking downstream buyers: Yangshan copper premiums hit their lowest since July, and smelters are pivoting to domestic sales, with China's refined copper exports spiking unusually in October. At the same time, domestic processing fees (TC/RC) plunged to a historic low of -$60, exposing the stark mismatch between ore shortages and soaring smelting capacity.
ING projects that unless new mines ramp up unexpectedly in 2026, TC/RC rates will remain depressed. Even if Chinese smelters honor their verbal agreement to cut output by 10%, displaced concentrate could flow overseas, leaving global refined copper production largely intact.
Price-wise, ING forecasts 2026 LME copper at an average of $11,500/ton, peaking in Q2 at $12,000 due to inventory spillover and spot tightness, then moderating in H2 as tariff clarity emerges. Upside risks include deeper Chinese smelter cuts, fresh mining disruptions, or accelerated demand from power grids and AI data centers. Downside risks stem from weaker Chinese demand, U.S. tariff reversals triggering inventory回流, and macroeconomic headwinds.
Long-term, ING believes electrification, renewables, and computing infrastructure will provide copper demand with a "structural safety belt." While the story is far from over, 2026's ride promises turbulence between "supply shocks" and "demand hesitancy."
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