In 2025, global copper prices trended upward amid volatility, with a marked lift in the price midpoint. The annual average prices of both SHFE copper and LME copper rose by more than 6% year on year. In 2026, the copper market is expected to tighten further, as supply-side constraints intensify due to slowing growth in copper mine reserves and declining ore grades. The copper concentrate shortfall is projected to widen to 254,000 tons.
On the smelting side, large-scale production cuts have yet to materialize; however, shrinking smelting margins in 2026 and tighter feedstock availability will continue to test the sector’s ability to sustain high growth rates. Should by-product revenues weaken, upstream mine tightness may be transmitted to the smelting segment.
On the demand side, emerging sectors such as new energy and artificial intelligence, together with rising global grid investment, are expected to form a combined growth driver, resulting in an estimated refined copper deficit of 10,000 tons for the year.
Coupled with liquidity easing driven by anticipated Federal Reserve rate cuts, a weaker US dollar, and structural imbalances in global inventories, upside support for copper prices remains robust. As a result, the annual price midpoints for LME copper and SHFE copper are forecast to rise to USD 11,500 per ton and RMB 91,000 per ton, respectively.
I. Review of the 2025 Copper Market
Since the beginning of 2025, global copper prices have trended higher amid pronounced volatility. The annual price midpoint has risen sharply, with price fluctuations widening significantly and there is a large gap between yearly highs and lows. According to market data, the most-active SHFE copper contract recorded a year-to-date low of RMB 72,073 per ton and a high of RMB 93,545 per ton. In the international market, the three-month LME copper contract fell to a low of USD 8,588 per ton and climbed to a peak of USD 11,871 per ton, with a price spread of USD 3,283 per ton.
From the perspective of annual average prices, the upward shift in the price midpoint was evident. In 2025, the annual price midpoint for SHFE copper rose steadily from around RMB 74,800 per ton in 2024 to approximately RMB 80,000 per ton, while the annual price midpoint for LME copper increased from USD 9,269 per ton in 2024 to USD 9,916 per ton, underscoring the strength of the global copper market.
First Quarter:
Copper prices traded firm on the back of multiple supportive factors. The US Federal Reserve signaled up to four interest rate cuts during the year, lifting expectations of global liquidity easing and significantly strengthening copper’s financial appeal. At the same time, tight mine supply led to expectations of output reductions at smelters, bringing the market close to a tight supply-demand balance. In addition, the implementation of US tariff policies in March widened the COMEX–LME price spread, attracting arbitrage flows that pushed prices higher, with SHFE copper briefly rising to RMB 82,000 per ton.
Second Quarter:
Reciprocal tariffs triggered a temporary correction in copper prices, followed by a period of stabilization and recovery. Escalating reciprocal tariffs between China and the United States intensified trade frictions and dampened market sentiment, leading to a sharp, short-term sell-off in copper prices. However, as prices retreated to relatively low levels, concerns among companies over further tightening of tariff measures prompted a wave of “front-loaded exports.” The resulting surge in export demand helped prices stabilize and gradually rebound, with the market returning to a fundamentals-driven trajectory.
Third Quarter:
Supply disruptions combined with the implementation of US rate cuts to drive another leg higher in copper prices. The formal rollout of US copper tariff measures reshaped global copper trade flows, leading to structural adjustments in regional supply patterns. In September, a major accident at Indonesia’s Grasberg mine, the world’s second-largest copper mine, sparked concerns over global supply shortages and intensified upstream disruptions. Meanwhile, the Federal Reserve’s long-anticipated rate cuts were officially implemented, confirming a looser liquidity environment and further boosting copper’s financial attributes. These factors collectively propelled prices higher.
Fourth Quarter:
Copper prices surged to fresh highs before retreating, with volatility intensifying at elevated levels. Rising expectations of further US rate cuts, improved risk appetite amid easing China–US trade tensions, and ongoing mine-side supply disruptions. However, elevated prices significantly dampened downstream demand, weakening end-user purchasing appetite and triggering profit-taking. As a result, copper prices entered a correction phase, characterized by heightened volatility.
II. Macroeconomic Outlook for 2026
1. Global economic growth to slow moderately in 2026
Against the backdrop of the Federal Reserve entering a rate-cutting cycle, external liquidity constraints are expected to ease markedly worldwide. Most non-US advanced economies and emerging Asian economies are likely to begin or continue cutting interest rates. Together with more proactive fiscal policies being rolled out in advanced economies, this policy mix will create favorable conditions for a recovery in domestic demand across non-US developed markets.
According to prevailing forecasts, major institutions generally expect average global GDP growth in 2025–2026 to remain around 2.8%, characterized by a moderate overall slowdown alongside increasing structural divergence. Emerging markets will continue to act as the main growth engine, with India leading at growth rates above 6%. China’s growth is expected to edge lower but remain in the mid-to-high range, serving as an important pillar of the global economy. By contrast, growth in advanced economies is set to slow broadly, with the United States and the euro zone posting growth rates largely concentrated between 1% and 2.1%, while Japan is expected to see a modest recovery.
2. Fed rate-cut cycle begins, global liquidity turns looser, US dollar remains on the back foot
Global monetary policy is poised for a clear shift in 2026. Building on the resumption of rate cuts by the Federal Reserve in September 2025, the Fed is widely expected to formally enter a sustained easing cycle. Market consensus suggests that the pace of rate cuts will become more defined in 2026, with two gradual cuts likely over the course of the year.
The onset of a Fed easing cycle will generate pronounced global spillover effects, potentially prompting major economies to follow suit and ushering in a broadly looser global liquidity environment. From a market perspective, easier financial conditions are expected to underpin demand recovery and channel additional capital into commodity markets, lending support to higher prices.
As the Fed’s easing cycle takes hold, the US dollar index is likely to remain under downward pressure in 2026. On the one hand, rate cuts will continue to narrow the interest rate differential between the United States and other major economies, eroding the dollar’s yield advantage and weighing on its attractiveness. On the other hand, from a policy standpoint, the Trump administration has historically favored a weaker dollar to support exports and reduce the trade deficit. In addition, persistently high fiscal deficits and heavy US Treasury issuance are expected to further cap dollar strength, leaving room for additional downside in the dollar index.
As a globally priced, US dollar-denominated commodity, copper tends to move inversely to the dollar. A weaker dollar would therefore provide direct upward impetus to copper prices. Against this backdrop of dollar weakness and sustained global liquidity easing, capital reallocation is likely to accelerate, with copper—combining both financial and industrial attributes as a risk asset—well positioned to attract incremental inflows, supporting valuation recovery and price appreciation.
3. China’s GDP growth to ease in 2026, with economic resilience intact
As the first year of China’s 15th Five-Year Plan, 2026 is expected to see the economy continue its structural adjustment while maintaining stable momentum under targeted policy support. Full-year GDP growth is projected at 4.8%, a mild slowdown from 5.0% in 2025, but with resilience becoming more pronounced. From a demand perspective, investment, consumption and trade are expected to show a differentiated pattern: stabilizing and rebounding investment, moderately pressured consumption, and resilient exports.
On the investment front, fixed asset investment is likely to stabilize and turn positive, becoming a key pillar of growth. In 2026, fixed asset investment growth is projected to recover to 2.5%, a marked improvement from -1.8% in 2025. Structurally, divergence across sectors will remain evident. Manufacturing investment is set to outperform, with growth accelerating from 2.5% in 2025 to around 5.0%, driven by continued policy support for industrial upgrading and robust investment momentum in new energy, high-end manufacturing and AI-related value chains. This will also be supported by a shift in producer prices from deflation toward low inflation, improving profit expectations and encouraging restocking and capacity expansion.
Infrastructure investment is expected to emerge from its slump, with growth rebounding to around 2.0%. The launch of major projects at the outset of the 15th Five-Year Plan, progress in new-type infrastructure development, and funding support from the early issuance of special-purpose bonds are all set to underpin a steady recovery in infrastructure spending. Real estate investment, while still contracting, is expected to see a narrowing decline, with the rate of contraction easing from -15.0% in 2025 to around -10.0% in 2026. As policy-backed financial tools help stimulate physical construction activity, the drag from the property sector is expected to gradually diminish.
Consumption is expected to maintain moderate growth, with some pressure on the pace but underlying resilience intact. Growth in total retail sales of consumer goods is forecast at 4.0% in 2026, slightly lower than 4.2% in 2025. This reflects, on the one hand, a high base effect following policy support measures such as trade-in programs and government subsidies in 2025, and on the other hand, lingering constraints on the release of household consumption potential, with short-term momentum yet to fully recover. That said, positive signals are emerging. Consumer price inflation is projected to rise to around 0.4% in 2026, and a mild rebound in prices should help improve consumption expectations. Together with inclusive consumption-boosting policies under the 15th Five-Year Plan, this is expected to provide support for consumer spending, keeping the overall consumption market on a stable footing.
On the trade front, exports are expected to remain resilient, with growth moderation but staying in positive territory. Export growth in 2026 is projected at 5.0%, slightly lower than 5.4% in 2025, but resilience is expected to remain solid amid easing China–US trade frictions. On the import side, rising domestic self-sufficiency in certain industries and continued import substitution are expected to keep imports in negative growth territory, with imports forecast to decline by 1.2% year on year, marginally wider than the -1.0% recorded in 2025.
III. Copper Fundamentals Outlook for 2026
1. Supply: Tight global mine supply to provide solid support for copper prices in 2026
Highly concentrated global copper reserves, slowing reserve growth and structurally declining ore grades
Global copper reserves have shown volatile growth in recent years, edging down slightly in 2024 but remaining at a relatively high level overall, with the pace of growth clearly slowing. From 2000 to 2010, global copper reserves increased from 340 million tons to 630 million tons, representing a compound annual growth rate (CAGR) of 6.4%. The CAGR slowed to 3.3% during 2010–2020 and further eased to 3.0% over 2020–2024. As of 2024, global copper reserves stood at approximately 980 million tons.
Copper reserves are highly concentrated geographically, with the top five producers accounting for 56% of global reserves and the top ten accounting for as much as 76%. Reserves are mainly located in Chile, Peru, Australia, the Democratic Republic of the Congo (DRC), Russia, Mexico and the United States. In terms of the reserve-to-production (R/P) ratio, the global static mine life for copper stands at 49.7 years, while China’s R/P ratio is significantly lower at just 22.8 years.
Globally, the average grade of copper resources has been on a long-term downward trajectory, falling from close to 0.8% around 2000 to approximately 0.4% in 2023, with the rate of decline accelerating. Newly added copper reserves are increasingly dominated by low-grade resources, implying higher mining costs and rising technical barriers for future development.
Muted capital expenditure growth among major miners, with limited large-scale new projects
Capital expenditure (capex) among global copper producers peaked in 2013. The subsequent downturn in copper prices sharply reduced investment appetite, leading to a steep decline in capex between 2013 and 2016, followed by only a gradual recovery since 2017. Mining companies have become increasingly cautious towards greenfield projects, favoring brownfield expansions and mergers and acquisitions to grow resources.
From the perspective of capex structure, expansionary spending has been on a downward trend since 2013. By 2024, expansionary capex accounted for just 44% of total investment in global copper projects, while sustaining capex rose to 56%.
According to the International Copper Study Group (ICSG), under the baseline scenario for large-scale copper projects, mine capacity growth during 2026–2028 will be driven mainly by new builds and expansions at small- and mid-sized mines, with very few large projects coming on stream. Before 2028, the only projects with annual incremental capacity exceeding 100,000 tonnes are expansions at Oyu Tolgoi, Almalyk, Julong (Julong), Lumwana and similar operations, while Reko Diq remains the sole large greenfield project.
Frequent supply disruptions constrain mine output growth
Supply-side disruptions have become increasingly frequent, weighing on normal mining operations and limiting output growth. Since 2025, disruption rates across global copper mines have surged, with accidents and recurring production stoppages leading to repeated downward revisions to annual output forecasts. The initially expected increase of 520,000 tons of mine supply in 2025 failed to materialize. Projects with notable output shortfalls include Grasberg (Indonesia), Kamoa–Kakula (DRC), El Teniente (Chile) and QB (Chile). Global copper mine output is estimated to have risen by just 1.5% in 2025 to 23.324 million tons of contained copper.
In 2026, major sources of incremental supply are expected to include Julong Phase II, Amman (Indonesia), Antamina (Peru), Mirador Phase II (Ecuador), Udokan and Malmyzh (Russia), and QB2 (Chile), with total incremental supply estimated at around 500,000 tons.
Smelting capacity continues to expand, widening the copper concentrate deficit
Global smelting capacity is expected to continue expanding in 2026 at a faster pace than mine supply. Global primary refined copper output is forecast to grow by 2.6% year on year, while copper concentrate output is projected to increase by only 2.1%, implying a persistent shortage of feedstock. The global copper concentrate balance is estimated at a deficit of 149,000 tons in 2025, with the shortfall expected to widen further to 254,000 tons in 2026.
According to Mysteel, on December 19, 2025, representatives of Chinese copper smelters and Antofagasta agreed on a 2026 benchmark treatment and refining charge (TC/RC) for long-term copper concentrate contracts of USD 0 per ton and 0 cents per pound, compared with USD 21.25 per ton and 2.125 cents per pound for 2025. While large-scale production cuts have yet to materialize, declining smelting margins and tighter feedstock availability in 2026 will continue to test the sector’s ability to sustain high operating rates. Should by-product revenues, particularly from sulphonic acid, weaken, upstream mine tightness may be transmitted to the smelting segment.
Overall, global refined copper supply growth is expected to slow, with output forecast at 28.08 million tons in 2025 and 28.64 million tons in 2026, representing year-on-year growth of 2.5% and 2.0%, respectively.
2. Demand: New sources of demand continue to expand, while traditional sectors remain resilient
Copper demand is undergoing a transition from traditional to new growth drivers. Emerging sectors represented by new energy, the digital economy and artificial intelligence are expanding rapidly, with incremental demand from new industries increasingly driving copper consumption. The share of copper used in electric vehicles, wind and solar installations, and data centers has surged from 6.8% in 2021 to 19.4%, making these sectors key pillars of demand growth.
New energy sector:
New energy has become the core engine of copper demand growth, combining high copper intensity with rapid industry expansion. In terms of unit consumption, new energy vehicles, especially battery electric vehicles—use two to three times as much copper as traditional internal combustion engine vehicles. Copper intensity exceeds 3,000 tons per gigawatt (GW) for solar PV installations, more than 4,000 tons per GW for onshore wind, and around 10,000 tons per GW for offshore wind.
From a scale perspective, global growth rates for new energy vehicles and wind power are expected to remain above 10% in 2026, while solar demand may see a slight year-on-year decline due to industry competition and policy factors. Overall, copper demand from the three major new energy segments is estimated at 5.03 million tons in 2026, up 8.4% year on year, making it the primary driver of incremental demand.
Artificial intelligence:
AI-driven data centers are triggering a surge in copper demand. According to McKinsey, global installed data center capacity may reach 82 GW in 2025. With the rapid adoption of AI and explosive growth in computing demand, the retrofitting of existing facilities and construction of dedicated AI data centers are accelerating. Global data center capacity is projected to reach 102 GW in 2026, including 62 GW dedicated to AI workloads and 40 GW for non-AI workloads. Copper demand from data centers is estimated at 590,000 tons in 2026 and could rise to 1.4 million tons by 2030.
Traditional sectors:
Rising global power investment and grid expansion continue to underpin copper demand.
Global power grid investment entered a phase of rapid growth in 2023, reaching USD 356 billion in 2023 and USD 388 billion in 2024, up 10% and 9% year on year, respectively. In 2024, grid investment in China, North America and Europe amounted to USD 83 billion, USD 114 billion and USD 84 billion, respectively, accounting for 72% of the global total.
Growing global electricity demand, combined with ageing power grids in Europe and North America, underscores the necessity of sustained grid investment. Electrification levels remain low in parts of Asia, Africa and Latin America, and driving demand for power equipment and grid infrastructure. Meanwhile, replacement demand for ageing assets is substantial, with the average service life of power grids reaching around 50 years in Europe and 40 years in North America, both approaching their designed lifespans.
Goldman Sachs estimates that grid investment in Western economies will rise sharply, with European grid investment expected to increase by 55% by 2035 and US investment by 24% by 2030. Total global grid investment during 2025–2030 could reach USD 12 trillion. The International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA) estimate annual investment needs of around USD 600 billion and USD 670 billion, respectively. Based on data from BNEF, the IEA and others, global grid investment during 2025–2050 is expected to grow at a CAGR of around 8%, with particularly strong growth in Oceania, Africa and Asia, while growth in the Americas and Europe is also projected to exceed 7%. The resulting pull-on copper demand will be substantial.
Between 2021 and 2026E, total global copper consumption is expected to rise steadily from 25.01 million tons to 28.65 million tons. New energy will be the dominant growth engine: the share of copper used in new energy vehicles is projected to surge from 1.9% to 7.4%, solar from 2.2% to 6.5%, wind power (onshore and offshore) from 2.1% to 3.4%, and data centers from 0.5% to 2.0%. This highlights the strong demand pull from new energy and the digital economy. Among traditional end-use sectors, power grids remain a core pillar, with a stable share of 20.8%–21.9%, while the shares of traditional automotive and construction demand continue to decline, from 9.3% and 26.6% to 7.1% and 18.1%, respectively. Consumer and industrial uses remain relatively stable at 10%–22%, forming the base of global copper demand.
Overall, global refined copper supply is estimated at 28.08 million tons in 2025 and 28.64 million tons in 2026, while demand is projected at 27.93 million tons and 28.65 million tons, representing year-on-year growth of 2.7% and 2.6%. From a balance perspective, the market is expected to see a surplus of around 150,000 tons in 2025, before returning to a near-balanced state in 2026 with a modest deficit of approximately 10,000 tons.
3. Inventories: Tight stocks outside the US to amplify price sensitivity
Structural imbalances in global copper inventories are expected to deepen further in 2026. The likelihood of US inventories flowing back into the global market remains low, while tightness in non-US regions is unlikely to ease.
Driven by forward expectations of US tariffs on refined copper, the US “vacuum effect” on global inventories is set to persist. Building on the substantial excess stocks accumulated in 2025, US restocking is likely to continue in 2026, further drawing supply away from non-US markets and keeping visible inventories outside the US at low levels. Current LME stocks are sufficient to cover just two days of global consumption, with a high proportion of cancelled warrants intensifying delivery pressure. Combined with frequent mine-side disruptions and limited medium- to long-term capacity expansion, the refined copper supply-demand gap outside the US is set to widen materially.
Overall, the global copper market is likely to remain in a fragile equilibrium characterized by surplus inventories in the United States and tight supply elsewhere. Structural distortions in inventory distribution, together with rigid constraints on supply and demand, are expected to significantly amplify market volatility risks.
IV. Copper Price Outlook for 2026
Global copper prices trended higher amid volatility in 2025, with a marked upward shift in the price midpoint. The annual average prices of both SHFE copper and LME copper rose by more than 6% year on year. Looking ahead to 2026, the fundamental support for higher copper prices is expected to strengthen further.
On the supply side, copper mine output remains subject to rigid constraints stemming from slowing growth in global copper reserves, declining ore grades, a shortage of large-scale new projects, and increasingly frequent mine disruptions. As a result, global copper concentrate production is projected to grow by just 2.1% year on year, well below the 2.6% growth expected for primary refined copper output, with the copper concentrate deficit forecast to widen to 254,000 tons.
On the demand side, strong growth from emerging sectors such as new energy and artificial intelligence, combined with increased investment in global power grids—a key traditional demand segment—will jointly underpin consumption. Global refined copper demand is expected to rise by 2.6% year on year to 28.65 million tons, shifting the market balance from a modest surplus in 2025 to a near-balanced state in 2026, with an estimated deficit of around 10,000 tons for the year.
Together with macro tailwinds from the onset of a US Federal Reserve rate-cutting cycle—driving looser global liquidity and a weaker US dollar—and market dynamics in which structural inventory imbalances amplify price sensitivity, upside momentum for copper prices remains robust. Against this backdrop, the annual price midpoint for LME copper is projected to rise to USD 11,500 per ton in 2026, while the annual price midpoint for SHFE copper is expected to increase to RMB 91,000 per ton.
Source：Mysteel Research Institute