The global copper market is grappling with a historic supply crunch, driven by plummeting Chinese inventories and surging U.S. demand amplified by looming Trump-era trade restrictions. Commodities giant Mercuria warns the sector is experiencing its “most severe supply shock in history,” while Goldman Sachs dramatically revises price forecasts upward.
Chinese copper reserves plunged by a record 55,000 metric tons last week to 116,800 mt – a depletion rate that could drain stockpiles by mid-June, according to Mercuria’s metals chief Nicholas Snowdon. China’s inventory buffer has become dangerously thin to meet roaring domestic demand, Snowdon told analysts. The crisis intensifies as the Trump administration launches a “dumping and subsidized overcapacity” probe into Chinese copper products, mirroring earlier 25% steel/aluminum tariffs.
COMEX copper futures have surged 16.35% YTD to $4.69/lb, with U.S. exchange inventories swelling to 2018 highs as traders hedge against supply disruptions. Despite China’s Commerce Ministry evaluating potential trade talks, market anxiety persists. A critical vulnerability emerges in China’s scrap copper supply chain – nearly half its 960,000 mt of 2024 U.S. scrap imports now face dual threats from declining shipments (-4.7% Jan-Feb 2025) and potential export bans.
EVs, charging networks, and renewables are fundamentally rewriting copper demand equations, stated Benchmark Mineral Intelligence’s Michael J. Finch. While EV copper use per vehicle has dropped from 100kg to 68-70kg through design improvements, sector-wide demand is projected to exceed 5 million mt annually by 2040. This transformation requires massive grid upgrades, charging infrastructure, and renewable energy deployment, Finch emphasized.
European smelting leader Aurubis is injecting €740 million into a Georgia-based recycling plant – operational by FY2025-end – to strengthen Western supply chains. As COMEX inventories hit six-year highs and Goldman Sachs raises Q2/Q3 2025 forecasts to $9,330/9,150 per mt (from $8,620/8,370), analysts warn the market could see $10,500/mt by Q4 2026 amid structural deficits.
Market watchers now scrutinize whether Washington and Beijing can defuse trade tensions before the copper crunch triggers broader industrial disruptions. With electrification demand growing 3x faster than mine supply through 2030, this crisis marks a pivotal stress test for the global energy transition.
