GF Securities: Global New Infrastructure Cycle Begins, Copper Price Trend Gradually Strengthens

Stock News12-09

Copper is widely used in electrical, mechanical manufacturing, construction, and transportation sectors. The sustained development of the Asia-Pacific region and rapid growth in emerging sectors like renewable energy and computing power are driving long-term global electricity demand. Despite being the off-season in 2025, copper demand remains robust, with prices showing unexpected resilience and a gradual upward trend. GF Securities forecasts a tight supply-demand balance for copper from 2025 to 2027, maintaining an upward price trajectory. Key insights include:

1. **Promising Copper Demand Outlook**: - **New Energy Vehicles (NEVs)**: Increasing electrification in automobiles, particularly NEVs with higher copper consumption, is expected to drive a 14% CAGR in copper demand from 2025 to 2030. - **AI Industry**: Rising AI training and service demands will boost copper usage in data centers, with an estimated additional 206,000 tons of copper demand from 2025 to 2030. - **Power Grid Infrastructure**: Aging grid systems and AI-driven power resource expansion will sustain long-term copper demand growth in the energy sector.

2. **Regional Demand Drivers**: - **China**: Domestic demand stabilization and advancements in "new quality productive forces" will support copper consumption. - **U.S.**: Grid upgrades and expansions are critical for reshoring manufacturing and AI development, likely reviving copper demand. - **EU**: Higher renewable energy adoption (solar, wind) and post-Ukraine war reconstruction will fuel copper demand. - **Other Regions**: Investments in India and Southeast Asia will further drive demand.

3. **Short-Term Resilience**: - Post-May 2025 tariff impacts are expected to ease temporarily. - Copper demand remains resilient due to: - **Energy Sector Stability**: Over 50% of end-use copper demand comes from energy-related infrastructure, backed by strong funding and long-term projects. - **Limited Substitution**: Aluminum’s replacement of copper faces technical and market constraints, minimizing short-term demand disruption.

**Risks**: - Global macroeconomic volatility may pressure copper demand growth. - Faster-than-expected aluminum substitution or weaker demand in power grids and NEVs could pose downside risks.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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