Copper Prices Poised to Rise to $15,000 per Ton

Overview

Citi's latest research report indicates that copper prices are expected to rise to $14,500 per ton in the coming month and reach $15,000 per ton within the next year, driven by structural demand growth—particularly in AI and energy transition—and supply-side constraints. Despite short-term risks such as Middle East tensions, overall growth resilience provides solid support for copper prices.

Core views

Citi has significantly raised its copper price forecast, expecting near-term prices to reach $14,500 per ton and $15,000 per ton within a year. This revision reflects strong structural demand growth, especially from artificial intelligence and energy transition investments. On the supply side, both mine production and scrap recycling are expected to fall short of expectations, potentially leading to a supply-demand gap of approximately 350 kilotons by 2027. Although geopolitical risks (such as closure of the Strait of Hormuz) and rising interest rates remain concerns, copper demand has shown strong resilience due to increased capital spending on energy transition and AI infrastructure. Additionally, market sentiment will likely remain supported by ongoing uncertainty around potential U.S. tariffs on refined copper until policy clarity emerges by late June. If tariff implementation is delayed or uncertainty persists, it could exert some pressure on markets, but the overall supply-demand fundamentals remain tight. Domestic copper consumption in China has declined year-on-year due to high base effects from new energy installations, but export performance remains robust, particularly in solar modules, batteries, and electric vehicles. Improving global (ex-China) manufacturing PMI also supports cyclical demand growth for copper.

Analysis framework

Citi uses its proprietary Global Copper End-Use Tracker (GCET) to assess copper supply and demand conditions, integrating macroeconomic trends, structural demand dynamics, and supply-side disruptions into a comprehensive analysis. The report places particular emphasis on the impact of energy transition and AI infrastructure development on copper demand, while also considering constraints from scrap supply, mine output, and geopolitical factors. By comparing different scenario assumptions (e.g., tariff policies, Middle East developments), Citi constructs base, bull, and bear cases to evaluate copper price trajectories. The report also leverages historical prices, inventory levels, and financial positioning data to gauge market expectations about future supply-demand balances. Furthermore, through detailed breakdowns of copper consumption across regions (e.g., China vs. rest of world), it analyzes regional disparities and their implications for global market balance.

Methodology notes

• Supply-Demand FrameworkSupply-demand framework

  Supply-demand balance analysis

  Assessing copper market supply-demand gaps by comparing mine output, scrap supply, and consumption levels to infer price trends

• Industry/Industrial Analysis FrameworkStructural Demand Analysis

  Structural demand growth (e.g., AI, energy transition)

  Analyzing the long-term drivers of copper consumption such as AI infrastructure buildout and green energy deployment, which exhibit persistence and high elasticity

• Cycle & Sentiment FrameworkInventory cycle (Kitchin)

  Inventory cycle fluctuations

  Using changes in inventory levels to gauge short-term supply-demand tightness and forecast price movements

• Macro/Strategic Analysis FrameworkMacro Risk Analysis

  Geopolitical and interest rate risks

  Evaluating how developments in the Middle East and shifts in interest rate expectations may impact commodity prices, especially safe-haven assets and industrial metals

• Supply-Demand FrameworkScrap Supply Elasticity Analysis

  Scrap supply response to price changes

  Assessing how scrap recycling volumes adjust with price movements, particularly whether higher prices can alleviate supply shortages

Key data

• Projected supply-demand gap in 2027~350ktBased on current spot price projections
• 2026 scrap supply growth rate<50%Lower than expected price elasticity
• Near-term copper price forecast$14,500/t next monthRaised from previous forecast
• One-year copper price forecast$15,000/tSupported by structural demand
• China's March copper consumption YoY change-0.6%Dragged by base effect from new energy installations

Impact & implications

Rising copper price expectations will benefit copper producers and related supply chain companies, especially amid accelerating energy transition and AI infrastructure development. Meanwhile, power equipment manufacturers, electric vehicle makers, and grid construction firms may face higher raw material cost pressures. If supply bottlenecks worsen or demand exceeds expectations, broader inflationary pressures could emerge, influencing monetary policy direction.

Risks

• Ongoing instability in the Middle East could heighten risk aversion and suppress copper prices
• U.S. imposition of refined copper tariffs could disrupt supply chains and cause short-term volatility
• Rising interest rates or global economic slowdown could weaken cyclical demand
• Faster-than-expected recovery in scrap supply could ease supply-demand tightness

What to watch

• Further signals on U.S. refined copper tariff policy
• Developments in the Strait of Hormuz and their impact on global supply chains
• China's new energy installation data and export performance
• Changes in global manufacturing PMI and industrial activity indicators