Tariff Expectations and Tight Supply Push International Copper Prices to Record Highs
The three-month copper futures price on the London Metal Exchange hit a record high on the 7th. During Asian trading hours on the 8th, copper prices extended their gains, rising to an intraday high of $14,617 per tonne. So far this year, LME copper futures have risen approximately 17%, with a gain of 47% over the past year.
Tariff Expectations Trigger Global "Copper Rush"
Analysts point out that the main catalyst for this round of copper price increases is the continued market expectation that the U.S. will expand tariffs on copper. The market widely expects the U.S. to impose a 15% tariff on refined copper starting in January 2027. This expectation has led U.S. traders to stockpile supplies ahead of the new policy, with large quantities of copper flowing from LME warehouses in Asia and Europe to the United States, triggering a trans-Pacific and trans-Atlantic "copper rush" ahead of schedule.
At the same time, Chile, the world's largest copper producer, has seen copper output remain under pressure due to extreme weather and mine operational disruptions. Copper export value fell to a more than one-year low in August.
Coexisting Demand Expansion and Supply Constraints
Hayden Locke, CEO of Canada's Marimaca Copper, noted that electrification is becoming a major driver of copper demand, and this trend is expected to continue for a considerable period. However, underinvestment in copper supply over the past 20 years has left the supply side inelastic, making it difficult to fully match the demand brought by electrification goals in the short term.
Meanwhile, artificial intelligence, data center construction, and the adoption of new energy vehicles have also become important drivers of copper demand growth. Analysts believe that if mine supply does not improve significantly, international copper prices are likely to remain elevated. However, persistently high copper prices may also prompt downstream companies to seek substitute materials, while geopolitical uncertainties and rising U.S. borrowing costs add further variables to the future trajectory of copper prices.
Daniel Yergin, Vice Chairman of S&P Global, said that high prices incentivize technological innovation, application of substitute materials, and recycling. However, copper is seeing many new uses that did not exist in the past, and developing a large new copper mine typically takes about 17 years, so supply-demand gaps may still emerge. He also mentioned that emerging fields such as humanoid robots are becoming potential new sources of copper demand.
International Trends Transmit to Domestic Market as Shanghai Copper Breaks Through 110,000 Yuan/Tonne
As of the close on September 8, the main Shanghai copper futures contract continued its strong trend, rising 1,410 yuan to close at 110,620 yuan per tonne, an increase of 1.29%.
Gu Fengda, chief analyst at Guoxin Futures, stated that the current copper market presents a pattern of "constrained supply and explosive demand." On the supply side, inventories remain tight with obvious structural scarcity; on the demand side, multiple favorable factors are stacking up. Whether it is the rapid growth in copper demand from new infrastructure driven by AI computing power, or the booming downstream sentiment brought by ultra-large-scale investment in power grids and steady growth in traditional manufacturing investment, all are amplifying the copper supply-demand gap. Entering the traditional peak season of "Golden September and Silver October," the resonance between supply and demand has further intensified the structural scarcity in the copper market, becoming a core factor driving copper prices higher.
Song Hongxiao, an analyst at Fubao Information, pointed out that the core logic behind the surge in the copper sector is a clear transmission chain — LME copper breaking record after record has directly boosted market expectations for improved profitability of copper companies, thereby driving concentrated capital inflows into the copper sector. Industry-wide, among the 17 listed copper companies that have released semi-annual reports, 14 maintained positive growth in net profit attributable to shareholders. In the long term, the demand structure is undergoing profound changes. Copper demand from emerging fields such as AI computing centers and new energy vehicles continues to grow.
Scrap Copper Purchase Prices Rise Over 20%, Recycled Copper Market Continues to Heat Up
This year, scrap copper purchase prices have risen more than 20% year-on-year. Despite higher raw material costs, end-user demand continues to provide support, leaving the industry with ample profit margins overall, and market trading activity continues to rise.
As of September 7, domestic inventories of electrolytic copper stood at 97,600 tonnes, down 12,200 tonnes from August 31 and down 6,700 tonnes from September 3, hitting a new low for the year.
At a copper smelting enterprise in Tongling, Anhui, a production manager said that in addition to traditional demand from the power and manufacturing sectors, the high-end computing power industry has brought new copper demand increments, further enlarging the copper raw material gap. The company's two production lines are operating at full capacity, and the proportion of recycled copper raw materials in input is also continuously increasing.
At a copper smelting enterprise in Tongling, Anhui, a production manager said that in addition to traditional demand from the power and manufacturing sectors, the high-end computing power industry has brought new copper demand increments, further enlarging the copper raw material gap. The company's two production lines are operating at full capacity, and the proportion of recycled copper raw materials in input is also continuously increasing.
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