Bullish factors supporting prices

1. Mine supply bottleneck (core long-term driver) New copper mines face tough approval, long construction cycles and high capital expenditure. Chile and Peru, the top two copper producers, are frequently disrupted by strikes, heavy rainfall and declining ore grades. Smelter treatment charges stay low, and mine output cannot ramp up quickly to meet rising demand.
2. New demand from new energy, power grids and AI Solar, wind power, EVs, energy storage and grid renovation bring steady demand growth. A new demand driver comes from busbars and power distribution for AI data centers, lifting copper consumption. This is the core reasoning behind the “green metal supercycle”.
3. Resilient demand from China Continuous rigid demand comes from domestic grid investment, transformers, copper rods and brass hardware. Tight scrap copper supply pushes many downstream buyers to switch to refined copper, further drawing down refined copper inventories.
4. Pre-emptive stockpiling ahead of US tariff expectations Traders are moving copper to the US in advance on tariff expectations, draining available spot supplies in Asia and Europe and tightening the physical market.

Major downside risks that may trigger price corrections

1. US tariff policy (the biggest variable) If tariff measures fail to meet market expectations, large US-held inventories may flow back to LME and trigger a price correction. If tariffs take effect as expected, tight spot conditions will persist.
2. Fed rate decisions and USD strength Copper is USD-denominated. Delayed rate cuts and a stronger US dollar tend to cap copper prices; rate cuts and looser liquidity support copper.
3. Weak manufacturing and property-related demand in China Brass for decoration and tubing is closely linked to the real estate sector, which acts as a drag on demand.
4. Unexpected shocks: geopolitics, port disruptions, mining strikes etc.

Consensus forecast from major institutions

• Goldman Sachs: LME copper target USD 14,700/ton by end of 2026; average USD 15,400/ton in 2027
• UBS: Copper may reach USD 15,500/ton in 2027 as market deficit widens Most institutions agree copper will stay high and volatile, instead of rallying in a straight line. Locking fixed prices for long orders carries high risk.

Practical tips for your copper & brass export business

1. Clearly state to customers: Our price is linked to LME copper, with a short validity period (e.g. 24 hours).
2. For bulk long-term orders, adopt an LME-linked pricing formula instead of fixed prices.
3. Under tight spot supply, propose partial shipments and staggered price locking.
4. Note: Brass cost follows LME copper price plus zinc price, so brass has extra volatility from zinc.