Section 1: Full Review of 2025 Copper Price Surge – From 8,600to 11,900 In 2025, copper prices have staged an extreme "stepwise surge" with an annual increase of over 30%, creating an unprecedented high-level operating pattern: First Round of Rally (Feb-Mar): Starting at 8,600pertonatthebeginningoftheyear,LMEcopperpricesquicklybrokethrough 9,800 per ton driven by supply disruptions such as the Chilean mining accident and the suspension of Indonesian mines, completing the first $3,000 gain; Brief Correction (Apr): A technical correction occurred due to weakened macro expectations, falling to a low of $8,700 per ton, but the correction only lasted two weeks before a rapid rebound; Main Uptrend (Aug-Dec): A frenzy rally began in August, breaking through the 10,000psychologicalbarrierinOctober.ByearlyDecember,theShanghaicoppermaincontracthit94,500yuanperton,andLMEcopperpricessoaredto 11,900 per ton, representing a 38% increase from the start of the year. Notably, the price surge was accompanied by an bizarre inventory divergence: COMEX (U.S.) inventories surged from 100,000 tons to 400,000 tons, while LME (Asian) inventories dropped to below 150,000 tons – only enough for two days of global consumption. This "sufficient total but regional mismatch" characteristic provided a perfect breeding ground for price speculation. Section 2: Mainstream Institutions' "Bull Market Narrative" – Triple Attribution of Supply-Demand, Policy, and Finance Currently, major institutions such as Goldman Sachs and Morgan Stanley, as well as domestic platforms like Futures Daily, generally attribute the copper price rise to a "resonance of multiple factors," with core logics summarized into three points:
- Supply Side: The "Illusion and Reality" of Systemic Shortage Institutions universally emphasize global copper mine supply bottlenecks: Accidents such as the 2025 Chilean El Teniente mining disaster and Indonesian Grasberg mudslides led to a 4.7% year-on-year decline in global output. Coupled with a 30% drop in mine grade since 1990, a 42% increase in mining costs, and an average annual growth rate of new capacity of less than 2%, the supply side faces severe constraints. The smelting sector is even more troubled – copper concentrate treatment charges (TC/RC) fell to -$40 per ton, leading to widespread losses and production cuts among Chinese smelters, further reducing supply flexibility.
- Demand Side: The "Increment Myth" of Emerging Industries New energy and AI have become the "demand engines" in institutions' narratives: New energy vehicles use 80kg of copper per unit (three times that of traditional fuel vehicles), annual copper consumption for photovoltaic and wind power installations exceeds 1.8 million tons, AI data centers have five times the copper intensity of traditional facilities, and global power grid upgrades drive high-end copper demand by over 2 million tons. Although the International Copper Study Group (ICSG) acknowledges a slight surplus of 178,000 tons in the 2025 market, it emphasizes that the long-term structural gap will widen to 300,000 tons.
- Financial Side: Dual Catalysts of Liquidity and Geopolitics Institutions cite the Federal Reserve's interest rate cuts as a key driver: The Federal Reserve completed its third interest rate cut of the year in December, with the U.S. Dollar Index falling below 92.7, significantly boosting the attractiveness of dollar-denominated copper assets. Combined with the Federal Reserve's resumption of Treasury purchases to inject liquidity, a large amount of capital flowed into the commodity market, pushing up prices. Meanwhile, the U.S. inclusion of copper in its critical minerals list triggered strategic stockpiling expectations, further amplifying the price increase effect. Section 3: Current Price Range and Trend Divergence – Is $12,000 the End or the Middle?
- Current Price Range: A "Dangerous Balance" at Historical Highs As of December 20, LME copper prices stabilized in the 11,700− 11,900 per ton range, with the Shanghai copper main contract fluctuating between 92,000-94,500 yuan per ton – an absolute historical high since 1980. In terms of valuation, the current price corresponds to a price-earnings ratio (P/E) of 35 times for global copper mining companies, a 120% premium over the ten-year average, far exceeding the valuation level during the 2011 copper price peak.
- Institutional Trend Forecasts: Structural Bull Market vs. Technical Correction Bullish Camp: Goldman Sachs predicts copper prices will break through $15,000 per ton in 2026, citing that demand growth from AI and energy transition will reach 10% with a persistent supply gap; Cautious Camp: Futures Daily and other sources warn of short-term risks, arguing that prices have fully priced in optimistic expectations. A 10%-15% correction may occur if the Federal Reserve slows down interest rate cuts or mines resume production, but the long-term "structural bull market" view remains intact. Beyond the Surface: The Truth Behind the Copper Price Frenzy – Capital Manipulation, Not Supply-Demand Driven Based on the above facts, I believe the current copper price surge is essentially a "man-made price-raising script" unrelated to real supply and demand, with an impending collapse:
- The Supply-Demand Gap is a Lie: A "Shortage Illusion" Created by Capital ICSG data clearly shows a slight surplus of 178,000 tons in the global refined copper market in 2025. The so-called "supply shortage" is entirely the result of capital manipulation. Through a combination of "tariff exemptions + strategic stockpiling," the U.S. forced traders to divert 70% of premium-grade copper to the U.S., creating an illusion of tight spot supply in Asia – COMEX inventories surged by 300% to 400,000 tons, while LME Asian inventories plummeted by 80%. This "inventory relocation game" is the real trigger for the price surge.
- Prices Severely Deviate from Value: A Leveraged Bubble Feast Current copper prices have decoupled from both cost and demand constraints: The global average mining cost of copper mines is approximately 6,500perton.Evenwithsmeltingcostsincluded,thereasonablepricerangeshouldbe 8,000- 9,000perton,whilethecurrentpriceof 11,900 represents a 32% premium. More critically, downstream demand cannot absorb the high prices – operating rates of Chinese copper processing enterprises have dropped from 85% to 62%, and new energy vehicle manufacturers have been forced to suspend capacity expansion due to rising copper prices. The so-called "emerging industry demand explosion" is merely a narrative for institutional speculation.
- Collapse is Imminent: Trigger Points for Bubble Burst Have Emerged Capital-driven bubbles will eventually burst, with potential triggers from three directions: First, if the Federal Reserve pauses interest rate cuts, global liquidity tightening will withdraw speculative capital; second, the concentrated sale of 400,000 tons of copper hoarded by the U.S. could instantly shatter market confidence; third, demand collapse caused by downstream production cuts, with signals of an 18% month-on-month decline in orders already appearing. Historical experience shows that commodity prices manipulated by capital often collapse suddenly at their peak – the 2008 plunge in copper prices from 8,900to 2,800 may be repeating itself. Conclusion: This copper price carnival is not a supply-demand driven bull market, but a trap for capital harvesting. For enterprises, avoid following the trend of stockpiling; for investors, be wary of the impending price collapse – when the tide goes out, we will see who has been swimming naked.