Citi Turns Bullish on Copper: $14.5k/t Target Next Month, $15k/t Within 12 Months

Overview

This is a Citigroup outlook report on the global copper market. The report releases March global copper end-use consumption tracking data and raises its copper price forecast to a near-term $14,500/t and $15,000/t over 6-12 months. The core view is that even with tail risks from Strait of Hormuz disruptions and interest-rate expectations, global growth and risk appetite remain resilient in the short term; meanwhile, uncertainty over U.S. copper tariffs, supply constraints, the energy transition, and AI demand make upside risks to copper prices more prominent.

Core views

The report’s core views include: first, uncertainty over U.S. refined copper tariffs may continue to support COMEX and broader copper price sentiment ahead of the end-June review deadline; second, Citi’s base case remains that no tariffs are announced, but policymakers may maintain strategic ambiguity to encourage copper inventories to stay in the U.S.; third, growth in scrap and mine supply in 2026-2027 may come in below expectations, potentially resulting in a deficit of about 350-360kt in 2027; fourth, although China’s domestic copper demand from solar, autos, and property remains weak in the short term, Chinese exports of EVs, solar, and power equipment, along with overseas AI power infrastructure and renewable energy investment, continue to support structural demand.

Analysis framework

The report combines Citi’s proprietary GCET copper end-use tracker, global and China monthly end-use consumption data, PMI, tariff scenarios, COMEX positioning, scrap imports, mine disruption assumptions, energy transition installation data, and export data to assess short-term catalysts for copper prices and the medium-term supply-demand balance.

Methodology notes

• Commodity FundamentalsCiti GCET Copper End-Use Tracker

  YoY tracking of copper end-use consumption globally, in China, and ex-China

  By using end-industry consumption, energy transition installations, exports, and cyclical demand indicators, it assesses the true resilience of copper demand.

• Price Scenario AnalysisRevision to Base and Bull Case Copper Price Scenarios

  Base target price, bull-case scenario, and probability adjustments

  The report raises its base copper price forecast and, in the bull case, considers stronger-than-expected cyclical growth, repricing of rate cuts, stronger structural demand, and further downside to supply.

• Supply-Demand Balance2027 Copper Physical Balance Deficit Model

  Supply disruptions, scrap recycling, and market-clearing price for substitution demand

  The report uses mine disruptions, scrap supply response, and demand growth to estimate the 2027 deficit, and infers that higher prices are needed to stimulate scrap recycling and demand substitution.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Copper

  Core Research Asset

  Strengths

  Tariff arbitrage tailwinds, weak mine and scrap supply, and resilient demand from AI and the energy transition.

  Weaknesses

  China’s domestic solar, auto, and property-related demand remains weak in the short term, while end-use consumption tracking is constrained by a high base in 1H26.

  Comparison

  Compared with the previous neutral view, the report turns bullish and raises both near-term and 6-12 month target prices.

  Risks

  Prolonged instability in the Strait of Hormuz, rising interest-rate expectations, fading tariff risk pricing, and inventory releases.

• COMEX Copper

  More Directly Affected by U.S. Tariff Expectations

  Strengths

  If tariff uncertainty persists or tariffs are announced and phased in from 2027, COMEX prices may reflect the tariff premium more fully.

  Weaknesses

  If tariff clarity remains lacking after end-June and the market downplays risk pricing, it may become a headwind.

  Comparison

  Relative to LME, COMEX is more sensitive to U.S. domestic inventories and tariff expectations.

  Risks

  Policy shifts, no tariff announcement, and gradual outflows of U.S. inventories.

• AI and Power Infrastructure Chain

  Structural Support Factor for Copper Demand

  Strengths

  AI capex drives demand for switchgear, transformers, and grid equipment, increasing copper consumption.

  Weaknesses

  Demand realization depends on the sustainability of capex and the pace of power infrastructure construction.

  Comparison

  Compared with traditional cyclical demand, AI and power infrastructure demand is viewed by the report as more resilient.

  Risks

  Slower capex, higher interest rates, and project delays.

• China EV, Solar, and Power Equipment Export Chain

  An Important Offset Supporting China’s Refined Copper Consumption

  Strengths

  Strong EV and solar product exports support copper consumption on the manufacturing side in China.

  Weaknesses

  Domestic solar installations, auto sales, and property-related demand remain weak.

  Comparison

  Export demand is stronger than domestic end demand, which is the key differentiator behind the resilience of China’s copper consumption.

  Risks

  Trade friction, weaker overseas demand, and lower fuel prices reducing the incentive for EV substitution.

Key data

• Near-term Copper Price Target$14,500/tCiti shifted its one-month copper view from neutral to bullish.
• 6-12 Month Copper Price Target$15,000/tThe report expects copper to reach this level within one year.
• 2027 Copper Market Deficitabout 350-360ktBased on current spot prices, the report expects the physical balance to remain tight.
• Model-Implied Clearing Priceabout $1,500/t higherNeeded to stimulate additional scrap recycling and substitution demand to clear the market.
• 2027-2028 Global Mine Disruption Allowance7%Citi raised its disruption assumption and expects zero mine supply growth in 2026.
• March 2026 Global Copper End-Use Consumption-0.6% YoYMainly affected by a high base in China’s renewable energy installations; cyclical demand was about +1% YoY.
• March 2026 China Implied Copper End-Use Consumptionabout -2% YoYDragged down by domestic EV, ICE auto, renewable installation, and property-related demand.
• China Solar Installations in March 20268.7GW, about -60% YoYThe report believes this was mainly due to a high base caused by front-loaded filings in 2025.
• China Wind Installations in March 20264.7GW, -11% YoYThe YoY decline in renewable installations weighed on that month’s end-use consumption tracking.
• China EV Exports in the First 4 Months of 20261.3mn units, about +120% YoYStrong exports supported China’s refined copper consumption.
• China Auto Exports in the First 4 Months of 2026about +70% YoYExport demand offset part of the weakness in domestic auto demand.
• Annualized China Solar Module Exportsabout 230-250GWDiversified demand from regions such as Africa and Europe supported exports.
• March 2026 Ex-China Implied Copper Consumptionabout +1% YoYCyclical consumption was weak, but power-related end demand and AI capex provided support.
• 2026 Copper Demand Growth in the Power Sectorabout +2%Demand was supported by AI, EV, BESS, and renewable energy project pipelines.

Impact & implications

For investors, the report implies that copper’s risk-reward is skewed to the upside in both the short and medium term, though the path of gains may be driven by tariff expectations, inventory flows, and geopolitical events. If the U.S. maintains tariff ambiguity, Hormuz risks ease, and supply continues to undershoot expectations, copper prices are more likely to move toward $14,500/t to $15,000/t; conversely, if tariff risks are downplayed by the market, U.S. inventories flow back out, or interest-rate expectations move higher, 3Q26 could see a temporary pullback.

Risks

• The Middle East situation and the duration of any Strait of Hormuz closure exceed expectations, triggering a pullback in risk assets.
• Uncertainty over U.S. refined copper tariffs is downplayed by the market after end-June, causing the prior tariff premium to decline.
• Higher interest-rate expectations or insufficient repricing of rate cuts suppress inventory financing and cyclical demand.
• Excess U.S. inventories are gradually released, absorbing part of the modelled 2027 deficit.
• China’s domestic copper demand related to solar, autos, and property continues to weaken.
• Scrap supply responds to high prices more strongly than expected, easing supply tightness.
• Current net long copper positioning is already relatively elevated, so a sentiment reversal could amplify volatility.

What to watch

• Whether the U.S. copper tariff review and policy language at end-June continue to maintain strategic ambiguity.
• Whether the Strait of Hormuz reopens in summer or in 3Q26.
• Changes in COMEX and LME copper inventories, U.S. inventory financing incentives, and cross-market arbitrage.
• Global PMI, especially whether U.S. manufacturing PMI continues to improve.
• Whether China’s exports of solar, EV, BESS, and power equipment remain strong.
• Whether scrap imports and recycling respond more strongly to high copper prices.
• Mine supply risks related to Grasberg, El Teniente, Kamoa, Cobre Panama, and DR Congo.
• Whether the market reprices rate cuts, energy prices, and risk asset preferences.