The futures market in 2025 is destined to be "yellow".
This side of the gold continued to soar, record highs; copper over there staged a more frantic attack.
According to statistics, COMEX copper futures in 2025 rose more than 28%, the international price of copper is on the $10,000 / ton historic mark! Force pressure rose 18% of gold, become the leading star in commodity futures.
Copper, this in the history of human civilization has been used for tens of thousands of years of ancient metal, why can in the current cycle to show such an amazing explosive force? When we look deeper, we will find a reincarnation of the fact that the copper era, has revealed the tip of the spear.
Imbalance between supply and demand: the onset of a "structural shortage" of copper
Unlike gold, copper's core value lies in its industrial properties. As a barometer of the global economy, the supply and demand pattern of copper is undergoing a fundamental shift.
As a core raw material in the era of electrification, copper's applications range from traditional power transmission and building pipelines to emerging electric vehicles, renewable energy and artificial intelligence infrastructure, covering almost every key aspect of the modern industrial system.
However, it is this wide range of application scenarios that makes the contradiction between copper supply and demand more and more prominent.
On the supply side, the global copper mining industry is facing unprecedented challenges. The distribution of global copper resources is highly concentrated, with countries such as Chile, Peru and the Democratic Republic of Congo (DRC) accounting for more than 60% of global copper production. However, in recent years, copper production in these regions has suffered frequent setbacks.
Chile as the world's largest copper producer, its copper ore grade continues to decline the problem is becoming increasingly serious. Data show that the average grade of the country's major copper mines has fallen from 0.9% a decade ago to below 0.7% at present. Meanwhile, political unrest in Peru has led to frequent shutdowns of several large copper mines, resulting in a supply loss of about 300,000 tons in 2023 alone.
More worrying is that the development cycle of new copper mines is long and costly, from exploration to production usually requires 8-10 years and billions of dollars of investment, this supply rigidity in the short term can not ease the market tension.
On the demand side, the situation is even more complex. The global green energy transition is creating unprecedented demand for copper. Electric vehicles, for example, require an average of 83 kilograms of copper per vehicle, four times more than traditional fuel vehicles. The construction of charging infrastructure is also incredibly copper-intensive, with an average fast-charging pile requiring around 8 kilograms of copper.
The International Energy Agency predicts that by 2030, demand for copper from clean energy technologies alone will nearly triple. Meanwhile, the arithmetic needs of the artificial intelligence revolution are triggering a boom in data center construction, and demand for copper cables and cooling components is growing exponentially in these "steel mills of the digital age".
Of particular note, traditional analytical models often underestimate the incremental demand from the new energy revolution. Goldman Sachs pointed out in its latest report, by 2030, global copper demand may grow by 50%, while supply growth may only meet half of it, copper "super cycle" may have begun.
Policy game: the new period of "copper rights" competition
On a global scale, the strategic value of copper resources is being redefined. In the past, oil was regarded as the most important strategic resource, but in the context of energy transformation, copper is becoming a new "strategic metal".
This shift is triggering a new round of resource games between major powers, further exacerbating tensions in the copper market.
The key mineral strategy implemented by the United States through the Inflation Reduction Act is particularly noteworthy. The bill tries to build an electric vehicle supply chain system that excludes China, but faces serious challenges in the field of copper resources. Data show that the United States relies on imports for about 40% of its refined copper.
This has led the U.S. to accelerate mining cooperation with allies such as Canada and Australia, as well as restarting long idled copper mining projects in the country. However, these measures are difficult to see the effect in the short term, but instead pushed up the global copper market tension.
China as the world's largest copper consumer, its coping strategy is also striking. In recent years, China's non-ferrous metal enterprises to accelerate the overseas layout, in the Democratic Republic of the Congo (DRC), Peru and other resource countries to invest tens of billions of dollars. Zijin Mining's Kamoa-Kakula copper mine in the Democratic Republic of Congo (DRC) has become the African continent's most promising copper mining project, and is expected to reach a capacity of 800,000 tons in 2025.
At the same time, China is improving the copper scrap recycling system, through the circular economy to ease some of the supply pressure. However, in the face of the continued rise in international copper prices, these measures are still insufficient, and the domestic manufacturing industry is under increasing cost pressure.
Capital push: copper becomes the "new gold"
Financial factors are amplifying the volatility of copper prices while fundamentals are tight. With the Federal Reserve's monetary policy shift is expected to enhance, a large amount of capital is pouring into the commodity market to seek a hedge against inflation risk. Copper by virtue of both industrial properties and financial attributes of the characteristics of the natural capital to become the object of the chase.
Wall Street institutions on the copper market enthusiasm is unprecedented. Goldman Sachs has raised its 12-month copper price target to $12,000 per ton, and Morgan Stanley is predicting that copper prices could hit $15,000 in extreme cases. These bullish expectations attracted a large number of hedge funds, LME copper futures open interest has hit a record high.
Notably, these financial capitals are not only participating through the futures market, but are also actively acquiring physical copper stocks. There are reports that some commodity traders are hoarding large quantities of spot copper, further exacerbating supply constraints in the market.
Changes in exchange inventories are equally worrisome. copper stocks in LME registered warehouses have fallen to their lowest level in 15 years, and spot premiums continue to expand. This low inventory environment greatly enhances market volatility, and any sudden supply disruptions could trigger dramatic short-selling. 2024, due to the Red Sea shipping crisis, European copper spot prices were once $200/tonne higher than futures, the largest premium in a decade.
What is more alarming is that the financial properties of copper are undergoing qualitative changes. In the context of the continued weakening of the dollar credit, some countries central banks and institutional investors began to copper as an alternative reserve assets. Although the scale is not yet comparable to gold, but this trend is changing the traditional pricing logic of the copper market.
When copper is viewed not only as an industrial raw material, but also as a store of value, its price operation law will be more complex and difficult to predict.
