The fundamentals of copper remain resilient.

In mid-March, US copper prices surged strongly, hitting a record high, while SHFE copper also steadily broke through the 80,000 yuan/mt mark. The robust market performance greatly boosted investor enthusiasm. Looking back at this round of market trends, the driving factors are numerous and complex. Since the beginning of this year, the supply of copper mines and raw materials has remained tight, gradually transmitting downstream and prompting initial production cuts at smelters. The "stockpiling" frenzy triggered by US tariff policy risks has driven US copper prices to continuously refresh highs, subsequently pushing up LME and SHFE copper prices. Although the weakening overseas macro environment has limited the upside potential of copper prices, the resilience of short-term fundamentals is sufficient to drive further price increases. However, if the implementation of tariff policies falls short of expectations, copper prices may return to fundamental pricing, potentially leading to a high-level pullback. Investors should pay attention to risks.

At the March US Fed meeting, the Fed announced that it would maintain the federal funds rate target range between 4.25% and 4.50%, a decision highly in line with market expectations. The Fed's slowing pace of balance sheet reduction has continuously improved market liquidity expectations, leading to a stabilization of risk assets such as US stocks and Bitcoin, while the US dollar index has remained at low levels, sustaining the trend of monetary easing. Meanwhile, the US government announced plans to impose a 25% tariff on imported copper, sparking strong concerns about a significant rise in future import costs. Global suppliers, aiming to avoid potential risks, have accelerated the transportation of copper semis into the country, significantly boosting demand expectations in the US market and driving a rapid rise in US copper prices.

Domestically, demand-side performance in the first three months has been positive, with the copper market showing active demand and resilient production. Signs of domestic demand gradually "taking over" from external demand have begun to emerge. After the conclusion of the Two Sessions, the clear tone of proactive fiscal policy and moderately loose monetary policy has sent a strong signal of macro policy intensification to stabilize growth, greatly enhancing market confidence. Additionally, the domestic asset revaluation wave triggered by DeepSeek continues to ferment, continuously improving market expectations and effectively driving further economic recovery. A series of follow-up measures to boost consumption are accelerating, and the introduction and implementation of the "Special Action Plan to Boost Consumption" are expected to inject a strong stimulus into the consumer market, forming a more robust support.

Supply side, disturbances in the smelting sector have become increasingly significant in the short-term impact on copper prices. With spot TC for copper concentrates at historically low levels, a major domestic smelter announced production cuts at its smelter with an annual capacity of approximately 470,000 mt. From a long-term perspective, the domestic government has tightened regulations on new copper smelters, aiming to effectively curb capacity issues. In the future, only a few large enterprises are expected to meet the stringent entry thresholds, which undoubtedly means that domestic refined copper supply will gradually tighten. China's copper smelting industry is highly dependent on imported concentrates. Relevant data shows that domestic copper concentrate production in 2024 was only 1.64 million mt in metal content, while domestic refined copper production reached 13.24 million mt, with a copper mine self-sufficiency rate of only 12.4%. Entering 2025, copper concentrates are constrained by multiple factors such as production disruptions, declining grades, and rising exploration costs, and the tight supply issue has not been substantially alleviated. Several miners have successively cut production or lowered their 2025 production guidance. According to data from miners with updated annual reports, the 2025 production guidance increase is only 210,000 mt, a 47% decrease compared to the 2024 increase. We have revised down the 2025 mine supply growth rate to 1.5%, slightly lower than the 1.8% growth rate in 2024.

Demand side, copper consumption in 2025 will continue to exhibit high resilience, with the accelerated long-term green energy transition further exacerbating the supply-demand imbalance in the copper market. Each gigawatt of solar or wind power installed capacity requires nearly 5.5 mt of copper, three times the amount used in fossil fuel infrastructure. Strong demand from emerging fields such as NEVs (80 kg of copper per vehicle), AI computing centers (1.36 mt of copper cables per server), and UHV power grid construction is expected to drive the proportion of new energy copper usage to exceed 20% in 2025 and over 30% by 2030, highlighting the urgency of expanding copper production. In the short term, during the traditional peak demand season of "Golden March and Silver April," downstream purchase sentiment has improved significantly MoM, with tight spot supply in the market. As copper prices continue to rise, downstream purchase willingness has gradually weakened, with strong fear of high prices, and most purchases are based on rigid demand. However, if copper prices pull back, downstream purchase enthusiasm is expected to rebound quickly. Global consumption growth in 2025 is expected to reach 3.4%, with demand growth outpacing supply growth, providing solid support for copper prices.

In summary, tight raw material supply continues to pressure the supply side, and the effects of smelter production cuts continue to ferment, leaving copper prices with some room for further increases.

(Source: Futures Daily)

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Over 3,000 industry elites, representatives from upstream and downstream enterprises in the copper industry chain, government officials, industry associations, third-party equipment, logistics and warehousing, and academic experts will gather together. The conference covers the entire industry chain, including mining, smelting, copper processing, trade, recycling, and end-use applications.

At the conference, more than 100 exhibitors will showcase the latest copper processing and smelting equipment, high-quality raw material suppliers, and new-type copper-based materials, highlighting the innovation and vitality of the copper industry.

The conference features a variety of exciting activities: the main forum focuses on global copper market trends, raw material supply, policy impact analysis, and market direction interpretation. Sub-forums delve into industry hot topics in areas such as electrical power transmission and distribution, secondary copper, new copper-based materials, hardware and plumbing, and ESS. During the conference, there will also be a two-day field trip to 12 representative enterprises in the copper industry with a cumulative capacity of 1 million mt. Sharing cutting-edge technologies and valuable experiences, the event aims to upgrade the copper industry chain and promote high-quality industry development.

CCIE 2025 SMM (20th) Copper Conference and Copper Industry Expo Helps you grasp the industry pulse, expand your network, and seek business opportunities! SMM cordially invites you to gather in Nanchang, Jiangxi from April 22-25, to unite in the new era and jointly plan for new development!