Copper Prices Surge Despite Weak “Golden September” Demand — Decoding the 2025 Market’s “Tight Supply vs. Weak Demand” Paradox

During the 2025 “Golden September” peak season, China’s copper consumption remained lackluster — yet copper prices at home and abroad surged sharply against the trend. On September 29, LME copper rose more than 2% during the night session to USD 10,429 / ton, marking a significant year-on-year increase. SHFE copper futures followed suit, with the main contract hitting RMB 83,820 / ton — the highest level since June 2024. The rally continued into the morning of September 30, as the SHFE November 2025 contract climbed 1.43% to RMB 83,240 / ton by midday.

This unusual phenomenon was driven not by seasonal demand, but by a combination of a “hard supply gap” and a “self-reinforcing market expectation.”

1. Supply-Side “Black Swan” Triggers the Price Rally

A mudslide incident at Indonesia’s Grasberg Mine, the world’s second-largest copper mine, forced a suspension of major operations on September 8. According to Freeport-McMoRan, the accident will directly reduce global copper supply by 55,500 tons in 2025, while its 2026 output target has been revised down from 770,000 tons to 500,000 tons — a 270,000-ton impact. This disruption, combined with a weaker U.S. dollar, pushed LME copper above USD 10,259 / ton, a recent high. Although ICSG data show that global mine output rose 7.2% y/y in July, the Grasberg shutdown has effectively turned this “increase” into a “shortfall,” further tightening supply.

2. Cost Pressures Confirm Supply Tightness

Copper concentrate treatment charges (TCs) have continued to decline since 2023. On September 26, the imported copper concentrate TC index fell to -USD 40.36 / dry ton, down USD 46.83 / ton year-on-year — a record low. This directly reflects severe tightness in global copper concentrate supply, leaving smelters facing a “high-cost, low-margin” dilemma. Goldman Sachs and other institutions have revised down their 2025 global copper supply forecasts, predicting that long-term contract TCs will fall further — reinforcing market concerns over a deepening supply shortage.

3. “Weak but Resilient” Demand Provides a Floor

Despite soft seasonal demand — with downstream manufacturers halting production for 4–6 days during the Double Festival holiday — consumption has shown resilience. Structural demand from new energy vehicles (NEVs) and photovoltaic power continues to grow under the global energy transition. At the same time, falling copper prices have encouraged restocking at low levels, creating a “buying-on-strength” sentiment as prices rebound. This combination of demand resilience and supply shortage has underpinned copper’s sustained strength even during a muted consumption period.

4. “Self-Fulfilling” Market Expectations Amplify Volatility

Pre-market rallies in U.S. copper mining stocks and gains in Canadian mining shares further strengthened bullish sentiment. Capital inflows driven by the “tight supply” narrative have propelled copper prices beyond their fundamental levels. This self-fulfilling expectation cycle has magnified price volatility, allowing copper to surge even without a strong consumption catalyst.

Conclusion

The 2025 “Golden September” copper rally — amid weak demand but tight supply — reflects the fragility of global mine supply, rising production costs, and market expectation feedback loops. While consumption remains steady but unspectacular, supply disruptions, cost pressures, and speculative momentum have jointly fueled copper’s sharp uptrend. For investors, understanding the dual drivers of supply logic and market sentiment will be key to navigating the copper market ahead. For enterprises, optimizing inventory management and improving operational efficiency in a high-cost, low-demand environment will be critical to mitigating price volatility.

Source：Changjiang Nonferrous Metals Network