After reaching a record high in 2025, domestic copper prices continued their upward trajectory in January 2026, showing significant increases both year-on-year and month-on-month. By early February, prices were experiencing high volatility.
Industry insiders attribute the recent surge in copper prices to a combination of supply disruptions, growing demand, and policy expectations. On the supply side, global copper mines face long-term constraints including declining ore grades, rising extraction costs, and increased supply fragility. Data from the China Nonferrous Metals Industry Association indicates that the average global copper ore grade has fallen from 1.3% in 2005 to 0.65% in 2025, while extraction costs in 2025 were over 40% higher than in 2015.
On the demand side, "green energy" and "artificial intelligence" have become major drivers of copper consumption. Wind data shows that a typical new energy vehicle uses three to five times more copper than a conventional internal combustion engine vehicle, contributing to an increase in demand amounting to hundreds of thousands of tons. Furthermore, AI data centers have a much higher copper usage density compared to traditional data centers. The explosion in computing power demand and the construction of supporting power systems have led to a surge in demand for products like high-purity copper foil and precision copper cables.
Global liquidity and the geopolitical environment have also provided fertile ground for rising copper prices. "Ample global liquidity since the start of 2026, a strong equity market, coupled with a warming precious metals market, have collectively pushed copper prices higher," said Chen Xuesen, Vice President of the China Nonferrous Metals Industry Association.
Rising copper prices are exerting cost pressures on downstream enterprises. Copper is ubiquitous, found in everyday items from water taps and door handles to refrigerators and air conditioners. In industrial settings, it is a crucial raw material for cable production and energy storage battery manufacturing.
In December of last year, companies such as Anhui Meibo Intelligent Electric Appliance Group Co., Ltd. and General Air Conditioner (Wuxi) Co., Ltd. issued price adjustment notices, citing rising copper prices as a significant factor.
For some companies, enhancing their technological capabilities is the key to navigating these challenges. "Through structural design optimization and the application of advanced technologies like AI dynamic energy-saving technology, we have improved cooling and heating efficiency without increasing raw material usage, which has bolstered our resilience," said Zhu Lei, Vice President of Gree Electric Appliances.
Companies within the industry are accelerating innovation to break through constraints. Nuode Stock has begun mass-producing ultra-thin 3-micron lithium battery copper foil, reducing the volume of copper foil by 10%. Jintian Copper Industry has systematically upgraded its recycled copper process, stabilizing the purity of refined copper at 99.99% to meet the stringent purity requirements of high-tech industries.
"In the long term, whether it's intelligent mining and utilization of low-grade ores, comprehensive recycling in smelting, or the development of high-end materials by processing enterprises, technological innovation is the primary way to cope with cost pressures and achieve excess profits," said Hu Haibin, Chief Analyst of the Futures Department at Jiangxi Copper.
Against the backdrop of high copper prices, "using aluminum to save copper" has become an important strategy. This approach involves developing and applying products like aluminum alloy cables and copper-aluminum composite conductive busbars in sectors such as power, home appliances, and automobiles. The goal is to conserve copper resources and ensure supply chain security without compromising performance.
In March 2025, ten departments, including the Ministry of Industry and Information Technology, jointly issued the "Implementation Plan for High-Quality Development of the Aluminum Industry (2025-2027)." This plan listed "aluminum conductor cables and copper-aluminum composite materials for photovoltaic and wind power stations" and "aluminum heat exchange tubes for refrigerators and air conditioners" as key areas for expansion.
"'Using aluminum to save copper' is not equivalent to 'cutting corners'," Chen Xuesen emphasized. It is not a simple material substitution but relies on technological innovation to compensate for aluminum's performance shortcomings. Copper-aluminum composite materials combine the excellent conductivity of copper with the lightweight characteristics and cost advantages of aluminum. They have already found applications in fields like new energy, power cables, and home appliances.
Exploration of "aluminum-for-copper" substitution has yielded results in some sectors. According to the China Nonferrous Metals Industry Association, the average copper usage per air conditioner has decreased from 12 kilograms per unit in 2000 to the current 4 kilograms per unit. Similarly, the average copper usage per new energy vehicle has dropped from an initial 80 kilograms to the current 60 kilograms per vehicle.
The State Grid has also approved the use of copper-aluminum composite materials. Industry experts predict that over the next three years, the average copper usage per unit in distribution network equipment will decrease by 65%, and the average copper usage per complete set of switchgear will drop from 200 kilograms to 70 kilograms per unit.
It is understood that the value of copper-aluminum composite materials extends beyond just "cost reduction and copper saving." On one hand, the application of high-quality copper-aluminum composites offers environmental benefits, as the energy consumption for aluminum recycling is only 5% of that for primary aluminum production, which is lower than the energy required for copper recycling. On the other hand, it is crucial for industrial security and international competitiveness.
"The application and promotion of material substitution technologies like 'using aluminum to save copper' further enhance the resource conservation effect. This structural change signifies that China's growing dependence on imported copper raw materials, particularly copper concentrate, is set to change," Chen Xuesen stated.