What will copper prices be like in the low-carbon era?

The market is surging thanks to strong demand driven by the global energy transition trend and the goal of building a low-carbon economy.

The copper market is entering a long-term growth cycle, with demand surging thanks to the global energy transition and the move towards a low-carbon economy, while supply faces several obstacles such as ore shortages and geopolitical instability. According to the Vietnam Commodity Exchange (MXV), this solid supply-demand foundation will provide support to keep copper prices at high levels in the medium and long term.

Since the beginning of 2025, world copper prices have seen significant fluctuations. After a strong surge to a historical peak at the end of March, the market underwent a substantial correction in April. Notably, at the close of trading on March 26, the COMEX copper price set an all-time high, reaching $5.24 per pound, equivalent to $11,559 per ton.

Demand for copper is soaring, but supply is not keeping pace.

Two years ago, the U.S. Department of Energy (DOE) officially added copper to its list of critical and strategic minerals. Simultaneously, the government considers it a key material playing a vital role in its clean energy transition, electrification, and electrical infrastructure, and, more broadly, in national security. At this time, U.S. estimates that demand for copper in these processes will double by 2035.

Not only in the US, but the global energy landscape is undergoing a dramatic transformation, leading to fundamental changes in the structure of copper demand. According to the International Energy Agency (IEA), currently about 24% of copper demand comes from clean technologies such as renewable energy, electric vehicles, power grids, and energy storage. This proportion is expected to increase to 38% by 2030 and reach 45% by 2040.

In the transportation sector, an average electric vehicle consumes approximately 83 kg of copper, 3.6 times more than a vehicle using an internal combustion engine, while each electric bus requires 224–369 kg of copper. This high consumption is making electric vehicles a key driver of global copper demand, especially as many countries race to reduce emissions.

In 2024, global electric vehicle sales reached over 17 million units, a 25% increase from 2023, with China accounting for 11 million of those sales. According to estimates by the International Energy Agency (IEA), by 2040, the transport sector will account for 20% of total global copper demand, a significant increase from the current 13%.

Global electric vehicle sales chart from 2014 to 2024

Furthermore, the wave of new technologies, especially artificial intelligence (AI) and the need to store massive amounts of data, is also creating a potential niche for copper consumption. According to Macquarie Bank, global data centers will consume between 330,000 and 420,000 tons of copper per year by 2030.

Similarly, Europe is also entering a period of profound energy transition with unprecedented investment. According to the European Commission, the region needs to invest between $2 trillion and $2.3 trillion to comprehensively upgrade its power grid system between now and 2050, while current investment only reaches $300 billion per year, far short of actual needs.

Despite soaring global demand, the supply side faces significant challenges. In the US, domestic copper mining and production capacity remains limited, forcing the country to rely heavily on imports of refined copper from Chile, Canada, and Peru. This raises the risk of localized supply shortages in the short term.

The structure of US refined copper imports by country.

Meanwhile, in China, the shortage of refined ore is becoming increasingly severe. Currently, only about 20% of the global refined ore meets the country's stringent import standards. Faced with this situation, trading companies are forced to blend refined ore from multiple sources at overseas plants, leading to increased import costs and a tightening of supply.

Furthermore, copper supplies from key producing countries such as Chile, Peru, and the Democratic Republic of Congo face the constant risk of disruption. In Chile, a widespread power outage in February disrupted operations at several major mines, including Escondida, the world's largest privately owned copper mine. Meanwhile, in Congo, conflicts with the M23 forces have raised concerns about potential mining disruptions.

Copper price scenarios in 2025

Since the beginning of the year, the global copper market has experienced continuous and volatile developments. As analyzed above, because the US considers copper one of the important minerals in its sustainable economic development strategy for the future, after President Donald Trump took office, he stated that he would consider imposing tariffs on all imported metals, including copper.

This move comes at a time when global and US industrial demand is surging, particularly in the fields of artificial intelligence, automation, and clean energy transition, which has driven the price of the COMEX currency to unprecedented record highs in the first four months of this year.

Mr. Duong Duc Quang - Deputy General Director of MXV

Mr. Duong Duc Quang, Deputy General Director of MXV, stated that a report by the International Copper Study Group (ICSG) indicated that the global refined copper market faced a deficit of approximately 124,000 tons in November and 22,000 tons in December last year. Recently, the latest research by JP Morgan further highlighted that the copper shortage will continue into 2026, estimating a deficit of around 160,000 tons of refined copper. With current increased demand and in the context of awaiting information on US tariff negotiations, it is not ruled out that the COMEX copper price will reach $12,000/ton in 2025.

Conversely, in a less optimistic scenario, the global energy transition could be hampered by an unstable trade environment. Specifically, the increase in tariff barriers and protectionism. If an economic recession occurs, governments will be forced to tighten budgets, or even withdraw support policies, as exemplified by Germany ending electric vehicle subsidies at the end of 2023. Or, if China's economic growth – the world's leading copper producer, accounting for 50-60% of global metal consumption – slows from 4.6% to 4.1%, and the 1 trillion yuan fiscal stimulus package fails to take effect, leading to weak demand, copper prices could fluctuate below $10,000 per ton this year.

In the context of the global shift towards a low-carbon economy, copper is moving beyond its role as a conventional industrial metal to become a key component in the development of new energy infrastructure. MXV believes there is a high probability that copper prices will enter an upward cycle in the near future.

Van Ha - Thanh Tu

Source: https://congthuong.vn/gia-dong-se-ra-sao-trong-thoi-dai-carbon-thap-386617-386617.html