What will happen to copper prices in a low carbon era?

The copper market is entering a long -term growth cycle, as demand is recovered thanks to the world energy transition and the progress towards a low carbon economy, while the offer faces opposite winds such as the shortage of concentrates and geopolitical instability. According to the Vietnam Basic Stock Exchange (MXV), this solid supply and demand base will create support to help copper prices stay high in the medium and long term.

Since the beginning of 2025, global copper prices have registered notable fluctuations. After a strong rebound until reaching a historic peak at the end of March, the market experienced significant correction in April. It should be noted that at the end of the negotiation session of March 26, copper prices in Comex reached a historical record when reaching $ 5.24 a pound, equivalent to $ 11,559 a ton.

Copper demand is accelerating, but the supply has not followed the pace

Two years ago, the United States Department of Energy (DOE) officially added copper to its list of strategic and critical minerals. At the same time, the Government sees it as a key raw material in its transition plan towards clean energy, electrification and electrical infrastructure and, more widely, national security. At this time, according to US calculations, the demand for copper in the aforementioned process will double in 2035.

Not only the United States energy panorama, the World Cup is also changing strongly, which leads to fundamental changes in the structure of copper demand. According to the International Energy Agency (AIE), approximately 24% of copper demand currently comes from clean technologies such as renewable energy, electric vehicles, electrical networks and energy storage. This proportion is expected to increase to 38% in 2030 and reach 45% in 2040.

In the transport sector, an average electric car consumes about 83 kg of copper, 3.6 times more than a vehicle with internal combustion motor, while each electric bus requires between 224 and 369 kg of copper. This massive consumption is turning electric vehicles into a key driver of world copper demand, especially at a time when many countries rushed to reduce emissions.

In 2024, world sales of electric vehicles reached more than 17 million vehicles, 25% more than in 2023, and China consumed up to 11 million vehicles. According to estimates by the International Energy Agency (IEE), in 2040 the transport sector will represent up to 20% of the total world of copper demand, a significant increase compared to the current 13%.

Without stopping there, the new wave of technology, especially artificial intelligence (AI) and the need to store huge amounts of data, is also creating a potential niche of copper consumption. According to Macquarie Bank, global data centers will consume between 330,000 and 420,000 tons of copper per year in 2030.

Similarly, Europe is also entering a period of deep energy transition with an unprecedented investment. According to the European Commission, the region needs to invest between 2,000 and 2,300 billion dollars to integrately modernize its electricity system from here to 2050, when the current investment level is only 300,000 million dollars a year, far from real needs.

Despite the growing world demand, the offer faces serious challenges. In the United States, the capacity for production and extraction of copper at the national level remains limited, which forces the country to depend largely on the imports of refined copper in Chile, Canada and Peru. This increases the risk of short -term local supply shortage.

Meanwhile, in China mineral scarcity is becoming increasingly serious. Currently, only about 20% of the world mineral meets the strict import standards of this country. Given this situation, commercial companies have to mix mineral concentrates from many sources in foreign factories, which generates greater import costs and a limited offer.

But that is not all: copper supplies from key producing countries such as Chile, Peru and the Democratic Republic of Congo also pose a constant risk of interruption. In Chile, a generalized power cut interrupted operations in several important mines, including hidden, the largest private copper mine in the world. Meanwhile, in the Congo, conflicts with the forces of the M23 have raised concern about the risk of mining.

2025 copper price scenario

Since the beginning of the year, the World Copper Market has continually experienced numerous interesting events. As previously analyzed, because the United States considers copper one of the important minerals in its sustainable economic development strategy in the future, after President Donald Trump assumed the position, he said he would consider imposing taxes on all imported metals, including copper.

This movement was carried out in the context of a strong increase in world and American industrial demand, especially in the fields of artificial intelligence, automation and conversion of clean energy, which has caused the price of Copper Comex to establish many unprecedented records in the first 4 months of this year.

Mr. Duong Duc Quang, deputy general director of MXV, said: The International Copper Study Group (ICSG) report showed that the world refined copper market faced a deficit of around 124,000 tons in November and 22,000 tons in December last year. Recently, a last investigation by JP Morgan stressed that the shortage of copper materials will continue until 2026, estimating a deficit of around 160,000 tons of refined copper. With the growing demand as it is now and while we wait for news about the tariff negotiations of the USA.

On the contrary, in a less optimistic scenario, the global energy transition could be stagnated by an uncertain commercial environment. Specifically, the increase in tariff barriers and protectionism. If a recession occurs, governments will be forced to adjust their budgets and even withdraw support policies; In general, Germany will end the subsidies for electric vehicles at the end of 2023. Or if China’s economic growth (the world’s main copper producer, which represents 50-60% of total world metal consumption) falls from 4.6% to 4.1% and the fiscal package of 1 billion yuan does not come into force, which generates a demand for weak consumption, copper prices could flu The $ 10,000 / ton this year.

In the context of the global transition to a low carbon economy, copper is no longer a conventional industrial metal to become a key component in the development of new energy infrastructure. MXV believes that the possibility that copper prices enter into an upward cycle in the next time is high.