International Copper Price Breaks $10,000: Supply Tightness and Green Demand Dance Together, What's Next?

Supply Tightness and Green Demand Resonate: The Fundamental Logic Behind Copper's Break Above $10,000

Recently, the international copper price has broken through the key psychological threshold of $10,000 per metric ton, driven by multiple factors, drawing widespread attention from global financial markets. As a key commodity with both industrial and financial attributes, copper's strong performance is no accident—persistent declines in global copper inventories, frequent supply disruptions in major copper-producing countries, and a surge in demand driven by new energy and grid investments together form the core fundamental logic behind this rally.

Inventory Continues to Decline: A Clear Signal of Supply Tightness

According to industry statistics, visible copper inventories at the three major global exchanges (LME, COMEX, SHFE) have fallen to low levels in recent years. Notably, LME copper inventories have been declining steadily since their 2024 highs and are currently at historically low levels for this time of year; SHFE copper inventories are also rapidly depleting. This persistent decline in inventories directly reflects a tight balance in the spot market, providing solid support for copper prices.

Supply Disruptions in Major Producers: A 'Double Squeeze' from Chile and Peru

Chile, the world's largest copper producer, is facing multiple challenges including declining ore grades, water scarcity, and labor negotiations. Reports indicate that Codelco's 2024 output has fallen to its lowest level in nearly 25 years, while some large mines in the country have been forced to cut production due to water restrictions. Meanwhile, Peru, the world's second-largest copper producer, continues to see mine operations disrupted by social protests and logistical bottlenecks. These supply-side disruptions have driven global copper concentrate treatment and refining charges (TC/RC) to historic lows, further confirming the tightness in raw material supply.

Green Demand Surges: New Energy and Grid Investments Drive Copper Demand

On the demand side, the global energy transition is becoming a core engine for copper consumption growth. According to the International Energy Agency (IEA), electric vehicles use about four times as much copper as traditional internal combustion engine vehicles, while renewable energy projects such as solar and wind power require far more copper per megawatt of installed capacity than traditional thermal power. Additionally, major economies are accelerating grid upgrades—the U.S. Inflation Reduction Act and the EU's Green Deal both include large-scale grid investment plans, while China's ultra-high voltage and distribution grid construction remains robust. These structural demand increments are gradually offsetting weakness in traditional sectors like real estate, driving steady growth in global copper consumption.

Outlook: High-Level Volatility or Further Upside?

Looking ahead, the market is divided on the direction of copper prices. Optimists argue that with supply-side constraints unlikely to ease in the short term and green demand continuing to release, the copper price center could move higher. Some institutions even predict copper prices could hit new historical highs in 2025. Cautious voices, however, point out that current prices may have already priced in some future positive expectations, and high copper prices could stimulate increased scrap copper recycling and use of substitute materials. Meanwhile, global macroeconomic uncertainties (such as Fed interest rate policy and the pace of China's economic recovery) could still trigger periodic pullbacks.

Overall, the copper market is under the dual drivers of 'tightening supply' and 'expanding demand,' with a fundamentally strong pattern unlikely to reverse in the near term. However, investors should closely monitor inventory changes, mine restart progress, and policy moves in major economies to manage potential price volatility risks.

Risk Warning

The above content is for reference only and does not constitute investment advice. Commodity markets are highly volatile; investors should fully understand the associated risks and make independent judgments based on their own risk tolerance.