During Asian trading hours on the 8th, three-month copper futures on the London Metal Exchange touched an all-time high of $14,617 per metric ton. By the close on the same day, Shanghai copper futures settled at 110,620 yuan per ton. Heightened tariff expectations coupled with tightening supply have triggered a global "copper grab" earlier than anticipated, with the scrap copper recycling market also experiencing remarkable activity amid tight spot supply and full-capacity smelting operations. What is driving this surge in copper prices, and where is the market headed?
Tariff Expectations and Tightened Supply Propel International Copper Prices to Historic Peaks
Three-month copper futures on the London Metal Exchange set a record high on the 7th. During Asian trading on the 8th, prices extended their upward momentum, climbing to an intraday peak of $14,617 per metric ton. So far this year, LME copper futures have gained approximately 17%, with a remarkable 47% surge over the past twelve months.
Tariff Expectations Ignite Global Copper Rush
Analysts point to persistent market expectations of expanded U.S. copper tariffs as the primary catalyst behind this rally. There is widespread speculation that the United States will impose a 15% tariff on refined copper starting January 2027. This anticipation has prompted American traders to stockpile supplies ahead of the policy change, with substantial volumes of copper flowing from LME warehouses in Asia and Europe to the United States, effectively sparking a trans-Pacific and trans-Atlantic "copper grab" well ahead of schedule. Meanwhile, Chile, the world's largest copper-producing nation, continues to see output constrained by extreme weather and operational disruptions at mining sites, with August copper export values dropping to their lowest level in over a year.
Demand Expansion Meets Supply Constraints
Hayden Locke, CEO of Canada's Marimaca Copper, noted that electrification trends are becoming a major driver of copper demand, a trajectory expected to persist for an extended period. However, underinvestment in copper supply over the past two decades has left the supply side lacking elasticity, making it difficult to fully align with the demand generated by electrification goals in the near term. At the same time, artificial intelligence, data center construction, and the proliferation of new energy vehicles are emerging as powerful forces boosting copper consumption growth. Analysts believe that without a significant improvement in mine supply, international copper prices are likely to remain elevated. That said, sustained high prices could prompt downstream industries to explore substitute materials, while geopolitical uncertainties and rising U.S. borrowing costs add further unpredictability to copper's future trajectory. Daniel Yergin, Vice Chairman of S&P Global, observed that high prices incentivize technological innovation, alternative material adoption, and recycling efforts. Yet copper is finding numerous new applications that did not exist previously, and developing a major new copper mine typically requires around 17 years, suggesting supply-demand gaps may persist. He also highlighted emerging fields such as humanoid robotics as potential new sources of copper demand.
International Momentum Transmits to Domestic Market as Shanghai Copper Breaks 110,000 Yuan Threshold
By the close on September 8th, the main Shanghai copper futures contract maintained its strong trajectory, rising 1,410 yuan to settle at 110,620 yuan per metric ton, a gain of 1.29%. Gu Fengda, Chief Analyst at Guoxin Futures, stated that the current copper market is characterized by a "constrained supply, surging demand" dynamic: inventory levels remain tight on the supply side with pronounced structural scarcity, while the demand side benefits from multiple tailwinds. Whether it's the rapid expansion of copper consumption from AI computing power driving new infrastructure, massive ultra-high-voltage grid investment projects, or steadily climbing traditional manufacturing investment boosting downstream activity, all factors are amplifying the copper supply-demand gap. As the traditional "golden September and silver October" peak season arrives, the combined forces on both supply and demand sides are intensifying the structural scarcity in the copper market, serving as the core driver behind rising prices.
Influenced by the copper price surge, A-share copper sector stocks opened higher and sustained gains on the 8th, climbing 3.86% in a single day and accumulating a 15.01% increase since the beginning of August. Among individual stocks, Jingyi Co., Ltd. hit the daily limit, while North Copper and Electric Alloy each advanced over 9%, with industry leaders such as Jiangxi Copper and Zijin Mining following suit. Song Hongxiao, an analyst at Fubao Information, pointed out that the core logic behind the copper sector's breakout follows a clear transmission chain: LME copper's successive record-breaking performances have directly boosted market expectations for improved profitability among copper producers, consequently driving concentrated capital inflows into the sector. Across the industry, of the 17 listed copper companies that have released interim reports, 14 reported positive growth in net profit attributable to shareholders. Over the long term, the demand structure is undergoing profound transformation, with copper consumption from emerging sectors like AI computing centers and new energy vehicles continuing to grow steadily.
Scrap Copper Purchase Prices Jump Over 20% as Recycling Market Heats Up
At the Judong Renewable Resources Trading Market in Taizhou, Zhejiang Province, merchants' freshly sorted and processed scrap copper is being claimed by waiting buyers on the spot, barely making it to storage before being loaded and hauled away. Amid this red-hot market, downstream procurement demand has skyrocketed. Many out-of-town buyers have opted for extended on-site stays, with purchase volumes noticeably higher than in previous years. Market merchant Chen Guanglei remarked that this year's copper market is the most explosive in recent years, with no concerns whatsoever about selling. Buyer Wang Shanguo added: "Overall copper demand this year has been exceptionally strong, with purchasing volumes up 10% to 20% compared to previous years. Quality scrap copper supply is extremely tight right now—if you don't secure it in advance, you simply can't get the goods." Reports indicate that scrap copper purchase prices have risen over 20% year-on-year. Despite higher raw material costs, robust end-user demand continues to provide support, leaving the industry with ample profit margins and driving sustained market activity. Pang Xiaojie, manager of the Judong market, stated: "The market is completely in scramble mode right now! We're hosting over a hundred purchasing companies daily, with customers crowding in for supplies and spot inventory clearing out instantly." As of September 7th, domestic electrolytic copper spot inventories had fallen to 97,600 metric tons—a decrease of 12,200 tons from August 31st and 6,700 tons from September 3rd—hitting a new low for the year. At a copper smelting enterprise in Tongling, Anhui Province, the production manager noted that beyond traditional power and manufacturing demand, the high-end computing industry is generating new copper consumption growth, further widening the raw material gap. The company's two production lines are running at full capacity, with the proportion of recycled copper raw materials in the feed mix also steadily increasing.
Comments