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Commodities

COPPER’S BULLISH MOMENTUM IS ONLY STARTING

ADMIN || 8th October 2025

In our 28th Sep premium content opinion piece titled “COPPER HAS SERIOUS DEMAND SUPPLY MISMATCH” we had highlighted the demand supply mismatch in Copper & how it could lead to a bull run in Copper prices globally after it closed over the psychologically important 10,000 levels:

https://macro-spectrum.com/opinion/copper-has-serious-demand-supply-mismatch

Copper prices again rose Tuesday as persistent upstream tightness and shifting end-use demand supports gains with the metal’s growing strategic importance pointing to a longer-term uptrend.

Concentrate treatment and refining charges remain deeply negative, a tell that raw-material supply is tight in the wake of Grasberg’s outage. Visible stocks of refined metal in exchange warehouses have climbed but are still not signalling surplus conditions. The futures curve also agrees as after months of backwardation, the LME structure has flipped into contango, which shows near-term tightness is easing and trade flows are normalizing.

Multiple mine disruptions from Indonesia to Chile to Africa highlight the industry’s structural fragility. Deposits are found at deeper and harder to get to levels, grade quality is deteriorating while rising capex levels are needed to maintain output levels. There isn’t an imminent deficit, but smaller shocks have bigger consequences against the current backdrop.

The nature of demand is also changing. Hardening power networks, building new AI data centers and even EVs are doing more of the heavy lifting while traditional construction and consumer goods lag.

Copper has gained by more than 5% last week, largely on supply concerns following a mine accident in Indonesia. The metal is within $400 of topping the record set last year.

Copper seems to have a very tight demand supply equation currently implying prices are likely to remain bid only. We expect 12,000 levels to come by $12k/t by mid CY26 in a best -case scenario & by end CY26 in the base case scenario.

CY27 might even see further upside towards $14k/t if global economy holds up and Fed does cut by 100 bps by Q1CY26 as we expect. The copper upswing might also be aided by weaker dollar globally, upswing in AI Capex as well as frontloaded European defence spending.

With Fed focussing more on it’s employment mandate than inflation, metals are likely to do well as inflation hedges. Hence Copper prices remain supported by current macros as well.

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