Copper markets are entering a new phase of tightness as supply constraints collide with fast-rising global demand. With concentrate shortages, falling treatment charges, and expanding consumption from AI data centres, EVs, and renewable energy, copper is positioned for sustained price strength and heightened volatility in the coming years.
The prices of copper are again heading towards a record high due to the looming structural shortage in the international market. Although the positive news about the Chinese market has increased the prices of the metal in the past few months, the root cause of the rising prices of copper remains the widening gap between demand and supply. The growing demand due to rapid urbanization, as well as the growing demand of the artificial intelligence data center, electric car, and solar power sectors, remains much ahead of the supply.
On the supply side, countries like Chile and Peru, which are large copper producers, are still struggling with lower grades of copper ore. Copper producers are now extracting larger quantities of rock to produce the same amount of copper, thus increasing production costs and making copper concentrate scarcer. Greenfield exploration to meet the increasing demand has failed to increase, despite warnings a decade ago, and now the difference can be observed by the treatment and refinement charges (TC/RCs) associated with copper smelters. A Chinese copper smelter and Antofagasta Minerals have agreed on a copper concentrate treatment and refinement charge of USD 0/ton for 2026, which is significantly lower than the value of USD 21.5/ton agreed upon in 2025, to say the least, because of the high demand-supply gap associated with copper concentrate market.
The growth of smelter capacities has proceeded much more quickly than mine production, leading to a fundamental mismatch that keeps driving the TC/RCs lower. Many smelters will turn more and more to the by-product earnings streams—sulfuric acid, gold, other metals—and more valuable copper cathode sales. Some smelting operations will be able to live with lower 30?USD/t-levels of TCs/RCs as a result. Industry sources also suggest that the lower rates will be easier to swallow as the old loans are paid off, and upcoming contracts will likely adopt a multi-year term pattern based upon this new minimum.
Spot copper concentrate TCs in China remained highly negative as of 23 December 2025, hovering around −43.7/t CIF. These negative charges indicate discounts for the smelters rather than fees for miners, which emphasize how adverse the supply squeeze is. The spot TCs have nose-dived from positive in 2021 to persistent negative conditions through 2024 and 2025, and the Chinese Port stocks have slid from highs to lower levels. Traders are also contributing to the adjustments. Some of them are unwilling to deliver cheap material to the spot market in China, and others have shown willingness to cut down to discounts of as low as −145/t for selected Peruvian cargoes. A cancelled tender on December 5 led to an abrupt market correction, emphasizing how spot TCs react to the new normal of the zero charge regime.
On the demand side, the copper demand is increasingly being driven by strong structural forces. The data centre demand experienced another year of strong growth in 2025, driven by artificial intelligence, cloud computing, and record levels of investment. As new infrastructure starts, demand for copper in power infrastructure continues strong. Talks of nuclear-powered data centres, scheduled for entry in 2027 or sooner, make clear once again the long-term copper demand requirements of this growing infrastructure. Nonetheless, recent statements on tariffs in the United States have brought uncertainty that may impact costs of construction and subsequent delivery times of critical materials.
Electric Vehicles continue to be another big source of demand for copper. “In 2025, electric vehicles represented almost 25% of the global sales of new passenger cars,” and this has been dominated by the Chinese and European markets. However, the “cost competitiveness of next-generation solid-state batteries and the increasingly electricized commercial fleets of the future” are expected to boost this growth. Some developing nations have also become leaders in transport electrification.
Renewable energy further improves the future prospects of copper. Global clean energy investment reached a record USD 2.2 trillion in 2025, far outpacing fossil fuels as per World resources Institute. Although the growth rate has decreased, it has remained significant enough to maintain the demand for copper in the renewable energy sector.
With supply shortages becoming tougher and rising demand in different sectors, the global market for copper is to continue facing shortages. Market price is likely to remain high due to increased uncertainty in the new era of copper industrial transformation.
