On Tuesday, amid trade turbulence, supply constraints, and optimism over long-term demand, LME copper futures surged past $12,000 per ton, marking a near one-month rally. This key industrial metal is poised for its largest annual gain since 2009.
Investors often view copper as a barometer of global industrial activity. Currently, the market widely expects prices to climb further as traders reroute more copper to the U.S. to preempt potential tariffs. Analysts attribute the latest copper rally to supply-demand imbalances, trade tensions, and robust demand from the renewable energy and AI sectors.
Copper prices have been rising steadily in recent months, fueled by growing concerns over tightening global supply. Mine shutdowns across the Americas, Africa, and Asia are expected to create significant supply gaps. Deutsche Bank warned that output from the world’s largest miners could drop by 3% this year, with further declines likely in 2026. The bank noted, "2025 is a year of severe supply disruptions, with several major mines facing operational challenges," adding, "Overall, we believe the market is in a clear deficit."
Another driver is the scramble for metals triggered by Trump-era tariffs. To avoid potential import duties, traders are diverting substantial copper inventories to the U.S., further depleting global stockpiles. U.S. investors are aggressively stockpiling copper, with hedge funds and traders leveraging New York’s high futures premiums to draw global copper into American warehouses. So far, the U.S. has locked in an excess inventory of 720,000 tons.
Copper’s strategic role in the energy transition is also amplifying demand. Investments in grid infrastructure, data centers, and other sectors are sustaining high growth rates. For instance, a medium-sized 10MW AI data center requires hundreds of tons of copper for power cables, while an electric vehicle uses around 80kg—far exceeding traditional combustion-engine cars. Global demand for copper from EVs, solar, wind, and AI is projected to reach 3.8–4 million tons this year.
Wall Street institutions anticipate continued price strength. Goldman Sachs, JPMorgan, and Citi remain bullish, with Citi suggesting copper could hit $15,000 in a "bull case" scenario, driven by a weaker dollar and Fed rate cuts enhancing copper’s appeal. CITIC Securities predicts that the dual narratives of "U.S. stockpiling" and "domestic production cuts" will accelerate in 2025, widening the supply gap by 60% and establishing $12,000 as a new baseline for copper prices.
Key related stocks: - **JIANGXI COPPER (00358)**: China’s leading copper smelter, with an annual cathode copper capacity of 2.1 million tons and over 70% revenue from copper. Recently, it submitted two non-binding cash offers to acquire SolGold Plc at 26 pence per share (~RMB 2.43). - **ZIJIN MINING (02899)**: Its Tibet Julong Copper Mine Phase II, set for completion by end-2025, will be a core growth driver. Q1–Q3 revenue rose 10.33% YoY to RMB 254.2 billion, with net profit up 55.45% to RMB 37.86 billion. Copper contributed 27.8% of H1 revenue. - **CMOC (03993)**: Q1–Q3 revenue hit RMB 145.49 billion, with net profit surging 72.61% YoY to RMB 14.28 billion—a record high. Copper output rose 14.14% to 543,400 tons, achieving 86.25% of its annual target.
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