Copper, often hailed as the “king of nonferrous metals,” has recently been witnessing a breathtaking surge in the international copper market. On March 14, the price of copper futures on the London Metal Exchange (LME) reached US$9,786 per tonne; the most active Shanghai copper contract for the 2505 delivery month closed at 80,020 yuan per tonne. Moreover, institutions such as Goldman Sachs and Citigroup have even predicted that copper prices will break through the US$10,000-per-tonne mark.

The rise in copper prices is by no means accidental—it’s the result of a complex interplay of various factors.

From a supply-and-demand perspective, global copper demand is growing faster than supply. Currently, demand is undergoing structural expansion. According to data from the International Copper Study Group (ICSG), in 2024, the growth rates of primary refined copper production and consumption worldwide were 4.7% and 2.9%, respectively—both higher than the 2.4% growth rate of mined copper. The recovery of the global economy and the transition toward green energy are driving sustained increases in copper demand. For instance, in the new-energy sector, the widespread adoption of electric vehicles and the development of charging infrastructure have significantly boosted copper consumption. Demand is experiencing explosive growth, yet in stark contrast, global copper raw material production has failed to keep pace. Major producing countries such as Chile and Peru continue to see declining copper output, and only a limited number of companies worldwide are posting significant production increases. It is expected that in 2025, the supply of copper concentrates will remain at a low growth rate, with factors such as mine production disruptions and constraints on the commissioning of new capacity continuing to plague copper mining supply. Given the robust demand for electrification and the slowing growth in mineral supply, Goldman Sachs forecasts that the global copper market will face a supply gap of around 180,000 tons in 2025.

From a policy perspective, the macroeconomic and policy environment have also played a significant role in driving up copper prices. The accommodative policies adopted by central banks in many countries have provided support for copper prices, fueling their upward trend. Moreover, expectations that the U.S. may impose an additional 25% tariff on copper have sparked supply-chain concerns, prompting companies to stockpile copper ahead of time and pushing up copper prices in the short term. Goldman Sachs noted that, given the rise in U.S. copper prices prior to the Trump administration’s planned tariffs, U.S. net copper imports could increase by 50% to 100% over the coming months. As the world’s largest consumer of refined copper, China’s demand—from both traditional industries and the new-energy sector—provides solid support for copper prices. The stability of its trade relations with major copper-producing countries directly affects the global market’s supply-demand balance. It is worth noting that the recently released “High-Quality Development Plan for the Copper Industry” in China, along with continued strong consumer-promoting policies at the domestic level, have had a significant boosting effect on the market that cannot be overlooked.

Turning to production costs, the rise in costs is also providing support for copper prices. Mining costs continue to climb, and rising labor costs, energy prices, and increased environmental investments are steadily pushing up marginal costs. According to a Goldman Sachs research report, copper prices will need to remain above $10,500 per ton in 2026 to ensure stable production capacity in countries such as Chile.

The rise in copper prices has had a profound impact on related industries. Since 2024, global copper prices have surged repeatedly, breaking historical records and undoubtedly placing cost pressures on traditional sectors such as power generation, construction, and home appliances. This has driven up the manufacturing costs of related products and intensified market competition. The continuous rise in copper prices, on the one hand, is compelling downstream enterprises to pursue technological innovation—for instance, replacing copper cables with aluminum ones—while, on the other hand, is calling for policy subsidies from various countries to help absorb these pressures.

Looking ahead, the green energy transition and the global infrastructure recovery will support copper demand, while supply-side constraints—stemming from resource limitations and investment cycles—could cause the supply gap to continue widening. Some analysts point out that, influenced by seasonal factors, this supply gap is expected to become particularly pronounced in the second half of this year. However, any significant shift in the Federal Reserve’s monetary policy, as well as the accelerating substitution of aluminum, could also impact future copper price trends. In this major upheaval in copper prices, both investors and industry professionals need to closely monitor market developments and prepare contingency plans accordingly.