Over the past year, the copper price has continuously set new historical highs, mainly influenced by trade flows related to tariffs.
The LME three-month copper futures closed up $118 on Thursday, at $14,334 per ton, with a cumulative increase of approximately 15% so far this year.
Currently, investors are betting that the stagnation in copper production growth will further push up the price of this industrial metal. Disappointing production data has shaken the market's expectation of a moderate increase in global copper supply this year.
According to the latest data from the International Copper Study Group (ICSG), global copper mine production decreased by 1.1% year-on-year in the first half of this year. Major producers such as Codelco in Chile and Freeport-McMoRan have all experienced double-digit declines.
Morgan Stanley initially predicted that copper supply would increase this year, but has now lowered its forecast to "basically flat or slightly down", indicating that global copper mine production may experience its first annual decline since 2017.
Although high copper prices usually prompt mining companies to increase production, challenges such as declining ore grades, frequent accidents, project delays, and extreme weather are hindering production growth.
Although there is no shortage of refined copper at present, speculation about the possibility of the United States imposing tariffs on imported copper has led to a large amount of copper flowing into American warehouses, making the supply situation more complicated.
The official data released by the US Department of Commerce on Thursday showed that driven by traders' large-scale import of copper before the possible US tariffs, the United States imported 225,094 tons of refined copper and copper alloys in July, reaching a record high.
According to data from the trade data monitoring agency Trade Data Monitor, the import volume announced by the US Department of Commerce in July was the highest among all monthly records since 1990, with a 78% month-on-month growth and an 8% year-on-year growth.
As the world's largest copper producer, Chile's copper production in the second quarter dropped to its lowest level in 19 years and has lowered its annual production forecast by 2.6%. The Chilean state copper company (Codelco) warns that even a moderate production target may be difficult to achieve this year.
Evy Hambro, the global head of thematic and industry investment at BlackRock, said in an interview last month that mining companies' difficulty in increasing production is the fundamental reason for the "very, very tight" copper market. He pointed out that the existing mine grades are constantly declining, assets are aging severely, and there are no new supply projects coming on stream.
ANZ Bank pointed out in its latest research report that driven by changes in US tariff policies, supply challenges at the mine end, and global energy transition demand, copper prices still have strong upward potential. The bank expects that copper prices could reach $14,500 by the end of this year and have the potential to further break through the $15,000 mark by the beginning of 2027.