Copper is widely used in electrical, mechanical manufacturing, construction, and transportation sectors. The sustained development of the Asia-Pacific region and rapid growth in emerging sectors like renewable energy and computing power are driving long-term global electricity demand. Despite being the off-season in 2025, copper demand remains robust, with prices showing unexpected resilience and a gradual upward trend. GF Securities forecasts a tight supply-demand balance for copper from 2025 to 2027, maintaining an upward price trajectory. Key insights include:
1. **Promising Copper Demand Outlook**: - **New Energy Vehicles (NEVs)**: Increasing electrification in automobiles, particularly NEVs with higher copper consumption, is expected to drive a 14% CAGR in copper demand from 2025 to 2030. - **AI Industry**: Rising AI training and service demands will boost copper usage in data centers, with an estimated additional 206,000 tons of copper demand from 2025 to 2030. - **Power Grid Infrastructure**: Aging grid systems and AI-driven power resource expansion will sustain long-term copper demand growth in the energy sector.
2. **Regional Demand Drivers**: - **China**: Domestic demand stabilization and advancements in "new quality productive forces" will support copper consumption. - **U.S.**: Grid upgrades and expansions are critical for reshoring manufacturing and AI development, likely reviving copper demand. - **EU**: Higher renewable energy adoption (solar, wind) and post-Ukraine war reconstruction will fuel copper demand. - **Other Regions**: Investments in India and Southeast Asia will further drive demand.
3. **Short-Term Resilience**: - Post-May 2025 tariff impacts are expected to ease temporarily. - Copper demand remains resilient due to: - **Energy Sector Stability**: Over 50% of end-use copper demand comes from energy-related infrastructure, backed by strong funding and long-term projects. - **Limited Substitution**: Aluminum’s replacement of copper faces technical and market constraints, minimizing short-term demand disruption.
**Risks**: - Global macroeconomic volatility may pressure copper demand growth. - Faster-than-expected aluminum substitution or weaker demand in power grids and NEVs could pose downside risks.