Recent copper price trend:
The main copper futures contract in Shanghai rose by approximately 10.3% during the year (from January 1st to March 5th), with a year-on-year increase (compared to the same period in 2025) exceeding 30%. The main international copper futures contract rose by approximately 9.8% during the year, with a year-on-year increase also exceeding 28%.
The stratified impact of economic situation on growth rate
1. Supply and demand fundamentals (core support)
Supply side: Due to insufficient capital expenditure in copper mining, the growth rate of the mining sector in 2026 is expected to be only 1%-2.2%. The spot TC of concentrate has fallen below -50 USD/ton, hitting a record low. The shortage of raw materials in the smelting sector has been transmitted to the supply of refined copper.
Demand side: The investment in new energy vehicles, photovoltaic and wind power, AI data centers, and power grids is expected to drive demand growth by 2.5% to 3%. The supply-demand gap is projected to be 330,000 to 830,000 tons, laying the foundation for copper price increases.
2. Macro policies and liquidity (pace disturbances)
Expectations for interest rate cuts by the Federal Reserve: It is expected to cut interest rates 3-4 times in 2026, leading to a weaker US dollar index, an increase in the valuation of copper priced in US dollars, and a strengthening of its financial attributes.
Global liquidity: The European Central Bank and the Bank of Japan have simultaneously eased monetary policy, leading to an influx of funds into commodities and pushing up copper price volatility.
China's recovery pace: After the Spring Festival, work and production resumed, with orders for infrastructure and manufacturing picking up to support demand, but the sluggish recovery of the real estate sector poses a potential risk.
3. Geopolitical and substitution risks (short-term suppression)
Geopolitical disturbances: Negotiations over mines in Chile and the progress of mine resumption in Panama, among other factors, affect supply stability and exacerbate price fluctuations.
Substitution effect: High copper prices have accelerated the shift towards "using aluminum to save copper", alleviating demand pressure in some sectors, but it is difficult to change the long-term shortage pattern.