According to the Global Times, international copper prices have shown a marked upward trend this year, with gains at times even outpacing those of gold. Energy transition and artificial intelligence (AI) development have fueled a surge in market demand for copper. Meanwhile, multiple copper-producing nations have experienced mining accidents this year, and the U.S. imposed a 50% tariff on copper starting in August—such “black swan” events have sounded the alarm on copper supply shortages. Analysts suggest the global “copper battle” is quietly escalating, representing not just a resource competition but a contest for future industrial dominance. Why has copper become the “new oil” as described by investment bank Goldman Sachs? What are the underlying reasons behind the copper price surge? And how will this reshape the international competitive landscape?

Each electric vehicle uses approximately 80 kilograms of copper

Amid shifting global economic and trade dynamics this year, copper prices have experienced sharp volatility, surging over 25%. On October 29, London Metal Exchange copper prices hit a record high, with the benchmark three-month copper futures contract reaching $11,146 per ton during intraday trading—surpassing the previous record of $11,104.50 per ton set in May 2024. Analyses by media outlets including The Wall Street Journal, Bloomberg, and the Financial Times attribute the surge primarily to production disruptions at major mines and reduced output forecasts from key producers, fueling global supply concerns. Underlying these worries is copper's increasingly vital role in today's evolving global industries.

As one of the earliest metals discovered and utilized, copper has consistently played a pivotal role in human production and daily life. From the Bronze Age, through the agricultural era and the Industrial Revolution, to the current information age, copper has been present throughout, though its applications have continually evolved with technological progress. Initially, limited processing capabilities restricted copper's use, with most being crafted into ceremonial vessels for nobility. Around 3000 BC, humans mastered true metallurgy by smelting copper ore, marking the dawn of the Bronze Age. Subsequently, bronze became widely used in manufacturing weapons, tools, and other essential goods for production and daily life, driving advancements in agriculture and handicrafts.

The United Nations Conference on Trade and Development (UNCTAD) stated in May this year that copper has emerged as a new strategic raw material in clean energy and digital technology sectors—essential for everything from electric vehicles and solar panels to data centers and artificial intelligence (AI) infrastructure. International investment bank Goldman Sachs previously declared copper the “new oil,” asserting that “no copper means no decarbonization.” The firm's report noted that without significant advances in carbon capture and storage technology in coming years, achieving net-zero emissions would rely entirely on emission reductions—namely electrification and renewable energy. As the most cost-effective conductor, copper occupies a central role in capturing, storing, and transporting these new energy sources.

The explosive growth in global copper demand is driven by AI development, the new energy transition, and grid upgrades. In the new energy sector, each electric vehicle contains approximately 80 kilograms of copper—4 to 5 times more than a traditional gasoline-powered car. According to the International Copper Association, a photovoltaic system with one megawatt of installed capacity contains about 5.5 tons of copper, while a 3-megawatt wind turbine can contain up to 4.7 tons. The massive computing centers essential for AI development require enormous amounts of electricity, which in turn relies heavily on copper. Data from Australian mining giant BHP indicates that Microsoft's $500 million data center in Chicago consumes 27 tons of copper per megawatt of electricity.

Despite cheaper alternatives, copper's unique combination of electrical conductivity, ductility, and recyclability makes it irreplaceable. Unlike many materials, it can be recycled indefinitely without performance degradation—a critical advantage as concerns grow over the environmental impact of raw material extraction. Without copper, components like motors, transformers, and cables would require significantly more alternative materials to achieve equivalent output.

Copper Shortage Sounds Alarm Bells

It's easy to see why copper supply is gaining increasing attention as energy transition and AI development become key battlegrounds for global competition. Yet the looming “supply-demand gap” has become an inescapable challenge. Forecasts indicate global copper demand will surge by over 40% by 2040, while supply struggles to keep pace.

The Wall Street Journal, citing data from the International Copper Study Group, reports that a 150,000-tonne copper supply deficit will emerge globally next year—a stark reversal from previous forecasts of surplus. The International Energy Agency (IEA) stated in May that copper demand driven by the energy transition will outpace supply over the next decade. Without intervention, supply could fall 30% short of demand by 2035. IEA Executive Director Fatih Birol stated: “It's time to sound the alarm.”

Factors contributing to the copper supply-demand imbalance include concentrated deposits, declining ore grades, lengthy mining cycles, and international political and economic influences.

Data indicates that in 2024, over 50% of global copper reserves are concentrated in five countries: Chile, Australia, Peru, the Democratic Republic of the Congo (DRC), and Russia. This resource concentration in a handful of nations contributes to supply vulnerabilities in international markets. Copper-producing countries frequently face political and economic disruptions, leading to unstable supply. The Australian Broadcasting Corporation recently reported that a series of major supply disruptions this year has prompted warnings from numerous analysts.

This year, the Kamoa-Kakula mining area in the Democratic Republic of the Congo suffered flooding, Chile's El Teniente copper mine experienced a collapse, and protests erupted at Peru's Constancia mining site—all significantly disrupting global copper production.

Against a backdrop of surging global copper demand, shallow, easily accessible mines are gradually depleting, while deep mining costs are soaring. Rapid depletion of proven reserves and limited new resources further exacerbate the widening gap.

"Investment growth struggling to keep pace with demand expansion is another key factor behind potential copper supply shortages. The cycle from exploration to production for new mines takes approximately 15 years. Due to high risks, companies are reluctant to invest ahead of schedule, yet the pace of development in copper-dependent industries far exceeds this timeline.

The looming copper shortage could stall global green and digital transitions. Meeting future demand may require building 80 new mines and investing $250 billion by 2030.

Multiple Nations Launch Comprehensive Competitive Measures

Against this backdrop, the “copper race” among nations and corporations is intensifying. Beyond mineral resources, this competition targets copper-related processing and manufacturing capabilities. What actions are countries taking to secure their interests in this race?

In July this year, the United States announced a 50% tariff on imported copper. U.S. Commerce Secretary Wilbur Ross stated, “The core objective is to bring the copper industry back home, repatriating copper production capacity and critical copper processing technologies vital to the industrial sector.” This move triggered a significant influx of copper into the U.S. However, it is noteworthy that the U.S. subsequently granted tariff exemptions for refined copper. Additionally, the U.S. designated copper as a critical mineral under the Defense Production Act to promote domestic copper production. It also collaborated with allies to form a so-called “mineral alliance” to secure its copper supply.

India is also actively boosting its copper output. Reuters reported in July that India announced a strategic plan to attract foreign companies to establish smelters and refineries domestically. This initiative aims to boost India's copper production capacity, targeting reduced import dependency by 2047. Mining Technology reported in July that India is seeking to include a dedicated copper chapter in its ongoing free trade agreement negotiations with Chile and Peru to ensure stable copper concentrate supplies. Indian media outlet CNBC 18 reported on June 6 that the plan has made new progress.

Japan has also recently taken action. Nikkei Asian Review reported on the 3rd that Japan will participate in Pakistan's Rekhtek copper mine project to address copper shortage concerns. According to the report, the Japan Bank for International Cooperation (JBIC) and other Japanese institutions are planning to participate in the Rekhtek copper mine project, with JBIC planning to provide a $300 million loan to the project. Earlier this year, Komatsu, Japan's leading mining equipment manufacturer, signed a $440 million agreement to supply heavy machinery for the Rekhtek project.

In September, the Canadian Broadcasting Corporation reported that the Canadian government's “Build Canada” fast-track project list includes plans to develop two copper mines. Canadian Prime Minister Carney emphasized that such projects “must enhance Canada's self-reliance, resilience, and national security.”

Data shows that in 2024, China imported 60% of the world's copper ore and refined over 45% of the world's refined copper. China is continuously advancing its strategic initiative to achieve breakthroughs in mineral exploration. Since the start of the 14th Five-Year Plan period, the Qinghai-Tibet Plateau has added over 20 million tons of new copper ore resources, with projected resource potential reaching 150 million tons. The Qinghai-Tibet Plateau is poised to become a world-class copper resource base.

Developed nations (such as Japan) control mining companies through equity stakes, while developing countries (like Mongolia) may achieve their objectives by imposing windfall taxes or restricting foreign investment. Major mineral-producing nations in Africa and Southeast Asia require local smelting and prohibit raw ore exports to enhance value-added.

The current “copper scramble” in international markets reflects that future industrial competition will be a comprehensive contest centered on critical resources, technological innovation, industrial chain control, and geopolitics. Future industrial competition will heavily depend on control over key resources. Simultaneously, it represents a mutually reinforcing competition between technological innovation and resource demand. Additionally, nations will strive to build secure and reliable industrial and supply chains to reduce external dependencies. Ultimately, this will be a competition shaped by geopolitical influences, with geopolitical factors playing an increasingly prominent role in future industrial rivalry.

Analysts suggest this competition will trigger sharp short-term fluctuations in international copper prices while driving long-term price increases. It will also impact the cost of everyday copper-containing products, potentially leading to price hikes for home appliances, electrical wires and cables, and electric vehicles.

As an integrated internet platform providing benchmark prices, on November 12, the benchmark price of copper on SunSirs was 86,843.33 RMB/ton, a decrease of 0.86% compared with the beginning of the month (87,595.00 RMB/ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.