Recently, Shanghai copper prices have once again surpassed the 100,000 RMB/ton mark. The United States and Iran have initiated two-week ceasefire negotiations; although the process has encountered setbacks, market panic has notably subsided. As geopolitical tensions in the Middle East ease, the trajectory of copper prices is expected to revert to being driven primarily by market fundamentals.

From the supply perspective, both domestic and international markets are facing the impact of production cuts. On the domestic front, smelter output is constrained by the dual pressures of raw material shortages and facility maintenance. On one hand, the tightness in mine-side supply continues to intensify; currently, the spot TC index for imported copper concentrate has fallen to a historical low, while copper concentrate inventories at domestic ports have declined compared to the same period last year. On the other hand, the supply of cold charge and scrap copper is also tightening. Processing fees for blister copper have dropped to 1,000 RMB/ton in the South and 700 RMB/ton in the North—both representing historical lows. Concurrently, with the full implementation of the "reverse invoicing" policy for recycled copper, the tight supply landscape for invoiced scrap copper remains unchanged; in regions such as Jiangxi and Guangdong, the VAT rates applied to recycled copper raw materials continue to hover above 10%. Furthermore, the second quarter marks the traditional maintenance season for domestic smelters. Despite elevated sulfuric acid prices, domestic smelter output is projected to decline month-on-month, constrained by the dual shortages of copper ore and cold charge.

On the international front, copper production has been primarily impacted by a shortage of sulfuric acid—a situation particularly acute among hydrometallurgical copper projects in the Democratic Republic of the Congo (DRC). In 2025, the DRC's output of refined copper is projected to reach 2.733 million tonnes, accounting for 9.6% of the global total; notably, approximately 90% of this production relies on hydrometallurgical processing, and 80% of the sulfur feedstock required for the country's sulfuric acid production is sourced from the Middle East. During the first quarter, the DRC's sulfur imports declined by 11% year-on-year to 368,500 tonnes, while imports of sulfuric acid plummeted even more sharply—dropping 74% to just 29,200 tonnes. As sulfuric acid serves as a critical chemical reagent for ore leaching, its scarcity is expected to significantly constrain local hydrometallurgical copper production. Overall, global refined copper supply is projected to retreat from its current high levels in the period ahead, with the supportive influence of supply-side factors becoming increasingly prominent.

From the demand perspective, the market currently remains in its peak season. Although the recent short-term rise in copper prices has led to a slight decline in operating rates among copper fabrication enterprises, these rates remain at a high level compared to the same period last year. As of April 9, SMM data indicated that the operating rate for electrolytic copper rods stood at 79.98%, surpassing the level recorded during the same period last year. Refined copper rod manufacturers have shown a reduced willingness to restock raw materials compared to the preceding period, resulting in a decline in raw material inventories to 29,300 tons. Furthermore, the pace of downstream inventory pickup has slowed for the first time since the Spring Festival, leading to an increase in finished product inventories of refined copper rods, which have now reached 45,300 tons. Separately, the operating rate for recycled copper rods remains at a low level. Although the price spread between refined and scrap copper rods has rebounded above the key threshold of 1,100 RMB/ton—a level typically favoring scrap rods—production of scrap copper rods has declined; consequently, their substitution effect on refined copper rods remains highly limited, and copper rod orders continue to shift toward the refined copper rod sector.

Overall, during the earlier sharp decline in copper prices, copper fabricators and end-users engaged in substantial restocking; consequently, demand experienced a slight pullback after copper prices climbed above the 100,000 RMB/ton mark. However, from the perspective of end-use consumption, demand continues to demonstrate resilience. In January and February, completed investment in power grids surged by 79.84% year-on-year, while completed investment in power generation sources rose by 32.35% year-on-year. In March, sales of new energy vehicles (NEVs) grew by 1.2% year-on-year, and NEV exports skyrocketed by 130% (1.3 times). These figures indicate that China's power sector maintains a high level of activity, while NEV sales in both domestic and international markets are showing signs of improvement; furthermore, geopolitical conflicts in the Middle East have further underscored the urgency of the global energy transition. Looking ahead, global investment in the power sector and the electrification of the automotive industry are expected to accelerate, thereby driving medium-term demand for copper. Consequently, in the short term, the dampening effect of high copper prices on demand is likely to be limited.

As of April 16, total global copper inventories stood at 1.27 million tonnes—a decrease of 15,000 tonnes from the previous week—with the primary driver of this inventory drawdown continuing to originate from China. Notably, the price spread between COMEX and LME copper has widened to over $100 per tonne, thereby diminishing the incentive for COMEX-sourced copper to flow into the LME market. Furthermore, the LME 0–3 month spread has narrowed from its annual high of $113 per tonne to $26 per tonne; consequently, the domestic copper import window is trending toward closure, resulting in a reduced contribution of imported copper to domestic supply. Coupled with expectations of production cuts by domestic smelters in the second quarter, domestic social inventories are projected to continue their downward trend, which will further alleviate the pressure of high global inventory levels.

In summary, the market impact of geopolitical risks is nearing its end, and copper price movements are set to revert to being driven primarily by fundamentals. Global refined copper production is expected to gradually decline, implying that supply-side support will continue to strengthen. On the demand side, activity is currently dampened by high copper prices; however, the medium-term growth trajectory for the power and new energy vehicle sectors remains clear, and demand resilience persists, suggesting that global inventories are poised for further depletion. Copper prices still possess room for upside; nevertheless, in the short term—given the demand-curbing effect of high prices and the intermittent nature of U.S.-Iran negotiations—the upward trajectory of copper prices is expected to experience intermittent volatility.

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