Where is the copper price now?

Core Thesis

I. Why is Copper Important? From a Cyclical Industrial Metal to a Key Mineral Resource with Strategic Attributes.

Cyclicality and Leading Indicator. The growth rate of copper prices is highly correlated with global GDP growth and the global manufacturing PMI. The growth rate of refined copper demand typically leads global capital expenditure by about nine months.

Demand Side: From Industrial Metal to Strategic Resource. Technological expansion, represented by AI, is significantly boosting copper demand for computing infrastructure and electricity. Geopolitics are strengthening copper's strategic attributes, with defense-related copper demand having prominent strategic significance.

Supply Side: Tightening Landscape Under Rigid Constraints. First, copper resource endowments are highly concentrated, with reserves mainly in Chile, Australia, Peru, the Democratic Republic of Congo, Russia, and other countries. Second, copper development cycles are long. Affected by the contraction in capital expenditure in the previous cycle, new production capacity cannot be quickly released. Finally, declining ore grades and resource degradation are raising long-term costs. Current copper production growth has turned negative, with supply remaining persistently tight.

II. What is the Industry Chain Structure? The copper industry chain features a cross-regional mismatch pattern of "resources, processing, and consumption."

Supply resources are in South America, smelting is in China. China's refined copper production accounts for nearly 50% of the global total.

Demand stock is in China, incremental demand is in Europe and America. China accounts for nearly 60%, making it the largest consumer market. However, in the past year, incremental copper demand has shifted towards the United States and major European countries. The driving force of demand may shift from primarily relying on emerging economies like China in the past to a pattern supported jointly by China, Europe, and the United States.

The supply chain is highly concentrated, strengthening strategic attributes. Taking China and the U.S. as examples, both are important consumer markets. The U.S. has relatively limited copper mine resources and smelting capacity and relies heavily on imports. In contrast, China has strong smelting and processing capabilities, occupying a hub position in the industry chain. Currently, consuming countries are strengthening supply chain security, while resource countries are focusing on resource control rights.

III. What Drives Copper Prices? Commodity attributes determine the central value, liquidity factors affect price levels, and trading attributes amplify volatility.

The commodity factor reflects the fundamentals of the copper market: copper consumption on the demand side, China's industrial value-added growth rate, and the U.S. Economic Policy Uncertainty Index to depict industrial activity intensity and demand expectations. The liquidity factor mainly measures the global capital environment and risk appetite. The U.S. Dollar Index, U.S. Treasury yields, and the Geopolitical Risk Index reflect global capital flows, financing costs, and resource liquidity changes, respectively. The trading factor reflects market sentiment and capital behavior. Non-commercial net long positions and the VIX reflect market risk appetite, while inventory reflects the market's changing expectations for the future supply-demand landscape.

IV. What is the Future Outlook? Global liquidity, the prospects of the U.S.-Iran situation, and supply-demand fundamentals are the three main lines.

Global monetary policy resembles 2021. Marginal tightening of liquidity will likely suppress the metallic attributes of commodities like copper. Since May, more than 10 central banks globally have taken rate hikes. With the rate hikes by the European Central Bank and the Bank of Japan already materialized, the Federal Reserve is unlikely to exercise the option of cutting rates. The marginal tightening of global monetary policy will curb the financial attributes of commodities like copper, so it is expected that the central value of copper prices will be difficult to move higher for now.

The risk premium from the U.S.-Iran conflict has temporarily weakened but remains uncertain. The price volatility in the initial stage of a geopolitical impact is essentially a rapid revaluation of the risk premium, while the rebound after the conflict ends is mainly due to demand recovery. We have always believed that Trump's tactical changes towards Iran this year are related to midterm election prospects. Once the midterms are over, whether there is a possibility of escalation in the U.S.-Iran conflict remains to be confirmed.

In the medium to long term, copper prices will still return to supply-demand fundamentals. Looking at a 3-5 year horizon, a rise in the central value of copper prices remains anticipated. According to S&P Global forecasts, the refined copper market will still maintain a tight balance around 2030, and the supply gap may widen further after 2030. Furthermore, as we have mentioned in several previous reports, if the global economy and some assets complete a deleveraging cycle around 2027-2028, the world may enter a new Kondratiev wave around 2029-2030. Overall, in the short term, copper prices will still be disturbed by factors like marginal liquidity tightening and geopolitical expectations. However, the medium-to-long-term supply-demand landscape remains tight, with clear fundamental support.

Of course, U.S. tariff policy will still impact copper price trends to some extent, but it is no longer the core contradiction currently.

Main Text

I. Why is Copper Important?

Copper was once called "Dr. Copper" due to its high correlation with the global economic cycle. With the acceleration of AI-driven digital infrastructure construction and global energy electrification, copper's role is shifting from a cyclical industrial metal to a key mineral resource with strategic attributes.

1. Dr. Copper: Barometer of the Global Economic Cycle

The copper industry chain is long, with wide application scenarios. The copper industry chain mainly includes mining and beneficiation at the mine end, smelting and refining, processing and manufacturing, and recycling. The upstream obtains copper concentrate through mining and beneficiation; the midstream uses pyrometallurgical or hydrometallurgical smelting processes to process copper concentrate into refined copper; the downstream uses refined copper as raw material to further process into copper products such as copper wire, copper plate, copper tube, copper rod, and copper foil, which are widely used in fields such as electricity, transportation, electronics, home appliances, machinery, and communications. Additionally, copper scrap recycling is an important supplementary source of copper supply.

Copper price trends are highly correlated with the global economic cycle. Because copper is widely used in key areas such as power grids, construction, and manufacturing, its demand is closely related to fixed asset investment and industrial production activities. When the global economy expands, manufacturing activity improves, and investment activities are active, copper demand typically grows simultaneously and drives copper prices up. Specifically, the growth rate of copper prices is highly correlated with global GDP growth and the global manufacturing PMI. Meanwhile, the growth rate of refined copper demand usually leads global capital expenditure by about nine months, also playing a forward-looking role in the physical investment cycle.

2. Demand Side: From Industrial Metal to Strategic Resource

Copper demand is shifting from being driven by traditional construction and manufacturing towards a structural growth phase centered on technological advancements in power systems and digital infrastructure upgrades.

Electricity remains the core support for copper consumption. Essentially, copper is a typical industrial metal. In terms of stock structure, electricity is the largest global copper consumption area, followed by transportation and electronics. Looking at specific application scenarios, copper in the construction sector is mainly used for power systems and electromechanical engineering. Infrastructure construction focuses mainly on transmission and distribution networks. Equipment-side demand primarily comes from electric vehicles, home appliances, and consumer electronics.

AI-driven data center investment is becoming a significant new source of copper demand. From a capital expenditure perspective, the industry structure of copper demand is undergoing marginal changes. Investment growth rates in technology sectors like information technology are significantly higher than in traditional industrial sectors. Copper demand is no longer solely driven by traditional manufacturing and infrastructure but is beginning to shift towards digital infrastructure. Among these, technological expansion represented by AI is significantly boosting copper demand for computing infrastructure and power systems, pushing copper to evolve from a traditional industrial metal towards a "digital infrastructure + strategic resource" attribute.

Data center investment will significantly boost copper demand. Compared to traditional commercial buildings, data centers are typical high-copper-consumption facilities. Their copper demand primarily comes from internal power transmission systems, power distribution equipment, and cooling systems. AI training data centers can have a copper usage of up to approximately 40 tons per megawatt. With the rapid popularization of generative AI, global technology companies are continuously increasing investment in computing infrastructure, and data center capacity is expected to maintain rapid growth. According to S&P Global forecasts, new global data center capacity may reach approximately 26 gigawatts around 2030, continuously driving copper demand growth. Furthermore, the terminal application of AI (such as embodied intelligence, etc.) will also bring new marginal demand, but the scale remains relatively limited in the short term.

AI driving grid expansion forms a second layer of pull on copper demand. Notably, AI investment is inherently power-intensive. As computing scale continues to expand, data centers have become a significant source of global electricity demand growth. According to S&P Global forecasts, by 2030, data center electricity consumption may account for 10% of total U.S. electricity consumption. In data-center-dense regions like Ireland, the proportion has even exceeded 20%. Against this backdrop, global investment in electricity infrastructure is expected to enter an expansion cycle, further strengthening copper's strategic position in energy infrastructure.

Energy transition remains an important source of copper demand growth. With the global energy system's transition towards low-carbon electrification, the proportion of electricity in end-use energy consumption continues to rise. According to S&P Global forecasts, global electricity demand will maintain an average annual growth of about 2.7% from 2025 to 2040, far exceeding the overall energy demand growth rate. Compared to traditional fossil fuel energy systems, new energy systems represented by wind power, photovoltaics, and electric vehicles have higher unit copper consumption. Therefore, areas such as renewable energy installations, grid expansion, and electric transportation will continue to drive copper consumption growth.

Geopolitics are strengthening copper's strategic attributes. Copper is indispensable in both traditional and modern military applications and is the second most consumed metal by the U.S. Department of Defense. Currently, equipment and infrastructure account for 30% of total NATO spending. As geopolitical conflicts persist and global rearmament progresses, demand for military equipment like drones, missiles, air defense systems, and communication devices may grow, further driving copper consumption. According to S&P Global forecasts, defense-related copper demand could triple by 2040. Although the defense sector's share of global copper consumption remains relatively limited, its demand is inelastic and strategically significant.

3. Supply Side: Tightening Landscape Under Rigid Constraints

Copper resource endowments are highly concentrated. Copper mine resources are unevenly distributed globally, mainly concentrated in a few resource-rich countries. In terms of reserves, the world's top five copper-producing countries are Chile, Australia, Peru, the Democratic Republic of Congo (DRC), and Russia, accounting for approximately 54% of the total. This highly concentrated pattern means global copper supply has a strong dependence on the resource endowments and policy changes of a few countries.

Long development cycles, limited supply release. Looking at capital expenditure at the mine end, major global copper mining companies' capex has declined significantly since 2013 and only gradually recovered after 2020. However, the cycle from exploration to production for a copper mine takes nearly ten years. Affected by the contraction in capital expenditure in the previous cycle, although mining companies' capex has recovered recently, new production capacity is still difficult to release quickly.

Declining ore grades and resource degradation are raising long-term costs. On the one hand, the difficulty of discovering high-quality copper mine resources globally continues to increase, especially after 2015, with newly discovered high-grade copper resource deposits significantly decreasing. On the other hand, the average global copper ore grade has been declining since 2001, showing a clear trend of resource degradation. As ore grades fall, more ore must be processed to obtain the same output, significantly increasing energy, water, and chemical consumption, driving up unit production costs.

Production growth turns negative, supply remains persistently tight. Global copper mine production growth has been declining since May 2025 and turned negative in the last two months, indicating further weakening of mine-end supply expansion momentum. Under structural constraints such as the lagged effect of capital expenditure cuts, long mine development cycles, and continuously declining ore grades, global copper supply is showing a trend of persistent tightening.

II. What is the Industry Chain Structure?

The global copper industry chain exhibits a cross-regional mismatch pattern of "resources, processing, and consumption": upstream resources are mainly located in South American resource countries; midstream smelting and processing are highly concentrated in China; and downstream demand is dispersed across major economies like China, Europe, and the United States. Under this structure, supply chain sensitivity and strategic attributes continue to increase.

1. Supply Resources in South America, Smelting in China

Global copper mine supply displays high regional concentration. Copper mining is mainly concentrated in South America and some resource-based countries, with Chile, the DRC, and Peru being the world's top three copper mine producers, together contributing nearly half of global copper mine output. These are followed by China, the United States, and Russia. In terms of trade flows, Chile and Peru are the world's largest copper ore exporters, with their combined export share exceeding 50%, giving them significant influence in the global copper resource supply system.

Copper smelting is highly concentrated in China. China's refined copper production accounts for nearly 50% of the global total, making it the world's most important copper smelting and processing center. In the global copper industry chain, China not only undertakes a large amount of smelting capacity but also serves as a core hub for processing and redistributing mineral resources.

Looking at upstream resource flows, China is also the world's largest importer of copper ore. Between 2015 and 2025, China's share of copper ore imports increased from 46% to approximately 70%. This change aligns with the continuous expansion of domestic smelting capacity, while also reflecting high raw material dependence and processing concentration.

The bargaining power in the copper smelting segment is relatively weak. The scarcity of mineral resources causes value distribution to be more concentrated upstream. In contrast, the smelting segment has relatively ample capacity and intense competition, limiting its ability to pass through prices. The treatment charge/refining charge (TC/RC) essentially reflects the supply-demand relationship for copper concentrate. When mine supply is relatively loose, TC/RCs are at higher levels, while they remain under pressure in a tight mine supply environment. Currently, global TC/RCs are at historical lows or even temporarily negative, reflecting the persistently tight supply-demand situation in the copper concentrate market. In this context, although China holds nearly half of the world's copper smelting capacity and possesses significant economies of scale, the industry's profit margins continue to be compressed.

2. Demand Stock in China, Incremental Demand in Europe and America

Demand is also highly concentrated, with the incremental structure changing. Looking at stock demand, China accounts for nearly 60%, making it the world's largest consumer market. Major European countries together account for more than 10%, the U.S. accounts for about 6%, and demand in other regions is relatively dispersed. Looking at marginal increments, over the past five years, demand growth was mainly contributed by emerging economies such as China and India. However, in the past year, the sources of incremental demand have shifted more towards the United States and major European countries, with developed economies increasing their marginal contribution to demand growth.

The recovery in the capital expenditure cycle is expected to be an important support for copper demand in developed economies. As mentioned in Part I, copper demand is strongly correlated with the global capital expenditure cycle. Currently, the willingness for capital expenditure among companies in Europe and America is improving. As the investment cycle enters an expansion phase, copper demand in developed economies is expected to recover continuously. In terms of investment direction, digital infrastructure, power system upgrades, and advanced manufacturing remain the main investment areas. The driving force for global copper demand growth may gradually shift from primarily relying on emerging economies like China in the past to a pattern supported jointly by China, Europe, and the United States.

3. Highly Concentrated Supply Chain, Strengthened Strategic Attributes

Key links of the copper industry chain are highly concentrated, increasing the importance of supply chain security. Looking at the division of labor in the global industry chain, copper resources are mainly concentrated in a few resource-rich countries like Chile, Peru, and the DRC. Smelting and processing are highly concentrated in China. Demand is mainly distributed across economies like China, Europe, and the United States. This pattern of "concentrated resources, concentrated processing, concentrated consumption" makes the copper supply chain vulnerable to factors such as geopolitical events, trade policies, and supply disruptions in resource countries, bringing supply chain security issues into increasing focus.

Taking China and the U.S. as examples, both countries will remain the world's most important copper consumer markets in the future, but there are significant differences in their supply chain layouts. The U.S. has relatively limited domestic copper mine resources and smelting capacity, relying heavily on imports for copper supply. In contrast, China, with its continuously expanding smelting and processing capabilities, has gradually strengthened its hub position in the global copper industry chain and improved raw material security through overseas resource investments.

Consuming countries are strengthening supply chain security; resource countries are securing resource control rights. On the consumer side, the U.S. is promoting domestic mine development by classifying copper as a critical mineral to reduce foreign dependence and enhance supply chain security. It also uses trade policy tools such as tariffs to strengthen supply chain constraints and support domestic industry development. The European Union has also included copper in its critical raw materials strategy framework, aiming to enhance domestic mining, processing, and recycling capabilities through the Critical Raw Materials Act to improve supply chain resilience. On the resource side, countries like Chile are strengthening resource control rights by increasing resource taxes and local processing requirements, with resource nationalism trending upward.

III. What Drives Copper Prices?

Copper prices are jointly driven by three types of factors: commodity, liquidity, and trading. Commodity attributes determine the central value; liquidity factors affect price levels and cycle positions; trading attributes amplify short-term price volatility. The pricing mechanism is evolving from a supply-demand-oriented framework towards a multi-factor resonance system.

Copper prices are not driven by a single factor but are the result of the combined action of global economic cycles, industrial structure evolution, and changes in financial conditions. Reviewing the past few decades, it can be roughly divided into six stages: post-war reconstruction, oil crises, economic recovery, the information revolution, the rise of Chinese demand, and turbulent adjustments. Among these, demand expansion phases like post-war reconstruction, industrialization of major economies, and global economic recovery often correspond to accelerated copper consumption growth and a rising central price. In contrast, shocks such as geopolitical conflicts, oil crises, financial crises, and the recent trade frictions and rise in resource nationalism lead to periodic pullbacks or increased volatility in copper prices by suppressing economic activity, triggering liquidity contractions, or increasing market uncertainty.

Overall, the long-term trend of copper prices is highly correlated with the global economic expansion cycle, while short-term fluctuations are more affected by factors like geopolitical conflicts, financial market risk events, and supply disruptions.

Commodity, liquidity, and trading factors jointly drive copper price trends. Based on a review of long-cycle copper prices and analysis of supply-demand fundamentals, we have constructed a "commodity, liquidity, trading" three-factor framework to characterize the long-term trends and short-term volatility sources of copper prices. The commodity factor reflects the fundamentals of the copper market: global copper consumption on the demand side, China's industrial value-added growth rate, and the U.S. Economic Policy Uncertainty Index are selected to depict industrial activity intensity and demand expectations; on the supply side, the aluminum price is used as an auxiliary indicator to reflect the non-ferrous metals sector's prosperity and potential substitution effects. The liquidity factor mainly measures the global capital environment and risk appetite. The U.S. Dollar Index, U.S. Treasury yields, and the Geopolitical Risk Index are selected to reflect changes in global capital flows, financing costs, and safe-haven sentiment, respectively. The trading factor reflects market sentiment and capital behavior. Non-commercial net long positions and the VIX reflect market risk appetite, while inventory reflects, to some extent, the market's changing expectations for the future supply-demand landscape.

In terms of commodity attributes, the demand side is the core factor determining the long-term trend of copper prices. From a macro perspective, as an important industrial metal, copper demand is highly correlated with the intensity of economic activity. Specifically, the growth rate of copper prices generally shows strong synchronicity with the growth rate of China's industrial value-added. During economic expansion phases, industrial production activities are active, leading to increased copper consumption demand, which pushes copper prices up. Conversely, during economic slowdowns or recessions, industrial demand weakens, and copper prices tend to face downward pressure.

In terms of liquidity factors, the global monetary environment and resource constraints are important variables affecting copper prices. Monetary liquidity is mainly reflected in the U.S. dollar cycle and changes in global financial conditions. On the one hand, copper is priced in U.S. dollars; a stronger dollar directly increases purchasing costs for non-dollar economies, suppressing copper demand. On the other hand, a stronger dollar is often accompanied by a tightening of global liquidity. For emerging economies, maintaining exchange rate stability often requires tightening monetary policy, which can suppress economic growth and industrial demand. If corresponding measures are not taken, they may face pressure from capital outflows and deteriorating financial conditions, ultimately also negatively impacting copper demand and prices.

Resource liquidity mainly reflects the availability of copper ores and cross-border flow constraints. The Geopolitical Risk Index can serve as an effective indicator for quantifying the risk of resource nationalism. Since 2022, the Geopolitical Risk Index has remained at high levels and fluctuated. The probability of resource countries imposing export restrictions or quotas on critical resources has increased significantly, leading to tighter resource liquidity, which is also a driving factor for copper prices.

In terms of trading attributes, capital behavior and market risk appetite are the main channels. Looking at capital behavior, non-commercial open interest in futures mainly comes from trend-following funds such as investment funds, better reflecting market speculative sentiment and changes in capital flows. Historical experience shows a high positive correlation between COMEX non-commercial net long positions and copper price trends, indicating that inflows of trend-following funds often reinforce the continuity of price trends.

From the perspective of market risk appetite, the VIX index, as an important proxy for global financial market risk sentiment, usually shows a significant negative correlation with copper prices. When market volatility rises and risk aversion increases, funds tend to withdraw from risk assets, putting overall pressure on commodities. In contrast, in an environment of low volatility and rising risk appetite, copper prices tend to perform more strongly.

Combining the above analysis, we conducted a statistical regression study on copper prices based on the three-factor framework. The results show that the model has performed well since 2006, with the fitted copper prices generally consistent with the actual copper price trend.

Looking at the central value of copper prices, over the past approximately 20 years, the level of copper prices has been mainly dominated by the commodity factor, reflecting the decisive role of physical supply and demand in the long-term price trend. However, in recent years, as copper's financial attributes have gradually strengthened, the influence of liquidity and trading factors has increased. In terms of volatility structure, the trading factor's explanatory power for short-term copper price fluctuations has significantly increased, and in recent years, it has gradually become an important source of marginal price changes, indicating that the impact of market capital behavior and risk appetite on copper prices is rising.

IV. What is the Future Outlook?

Current copper prices remain at historical highs, with both major exchanges rising nearly 10% year-to-date. Looking ahead, we believe global liquidity, the situation in the U.S. and Iran, and supply-demand fundamentals will be three core lines influencing copper price trends: short-term focus on liquidity tightening and geopolitical risk changes; medium-to-long-term focus remains on the evolution of the supply-demand landscape.

1. Marginal Tightening of Liquidity Will Likely Suppress the Metallic Attributes of Commodities Like Copper

Global monetary policy resembles 2021. Since May, more than 10 central banks globally have implemented rate hikes. With the rate hikes by the European Central Bank and the Bank of Japan already materialized, the Federal Reserve is likely to withdraw expectations of loose policies to prevent capital outflows and demonstrate economic resilience during the critical midterm election period, rather than exercising the option to cut rates. This change is similar to 2021.

The marginal tightening of global monetary policy will curb the financial attributes of commodities like copper. In the short term, we expect it will be difficult for the central value of copper prices to move higher.

2. Risk Premium from the U.S.-Iran Conflict Weakens, But Remains Uncertain

Historical experience shows that price volatility in the initial stage of a geopolitical impact is essentially a rapid revaluation of the risk premium, rather than a change in fundamental expectations. After the conflict ends, copper prices often experience a rebound. The main reason is the gradual recovery of economic activities and trade suppressed by the war, along with demand replenishment brought about by subsequent reconstruction investment.

The current situation differs from history. From a market performance perspective, crude oil prices surged in the early stages of the U.S.-Iran conflict, while copper prices only fell slightly, showing a limited overall response. Subsequently, the pullback in oil prices provided weak support for copper prices. Looking at cross-asset price ratios, the oil-to-copper ratio only rose from about 5 to about 8 (barrels/kg), which is significantly weaker than the historical level during the Russia-Ukraine conflict, which rose from about 7 to 15. This indicates that the transmission of this geopolitical shock to copper prices has clearly weakened.

It is worth noting that we have always believed that Trump's tactical changes towards Iran this year are related to midterm election prospects. Once the midterms are over, whether there is a possibility of escalation in the U.S.-Iran conflict remains to be confirmed.

3. Tariff Policy Has Some Impact on Copper Prices, But Not the Core Contradiction

At the end of July 2025, the U.S. announced a 50% tariff on copper products, but the tariff on refined copper remains in an exemption and review phase. The U.S. Department of Commerce must submit an updated recommendation by June 30 next year on whether to extend the tariff to refined copper. A preliminary plan indicated that a 15% tariff could be imposed on imported refined copper starting in 2027, gradually rising to 30%. In this context, the market has adjusted pricing through two main channels:

First, cross-market inventory migration. COMEX copper inventories remain at elevated levels. Since 2025, under the expectation of potential copper tariffs, the market has engaged in cross-market arbitrage trading, driving copper transfers from the LME and SHFE to COMEX, leading to continuous inventory accumulation. With the initial inventory relocation largely completed, the space for cross-market arbitrage has narrowed significantly, and the marginal impact of inventory migration on prices is weakening.

Second, cross-market spreads. The spread between COMEX and LME has re-widened. As the tariff decision deadline approaches, the spread turned positive in late March and has continued to widen, but it remains significantly below the extreme level of around $3,000 per ton seen in July 2025 when markets feared a comprehensive 50% tariff. This indicates that the market is currently pricing in a "phased, reasonable tariff" expected path.

We believe that the current spread between the two major exchanges has partially reflected expectations of future tariffs on refined copper. Tariff policy will still have some impact on copper price trends, but it is no longer the core contradiction.

4. In the Medium to Long Term, Copper Prices Will Still Return to Supply-Demand Fundamentals, and a Rise in the Central Value is Anticipated

Copper prices have fundamental support. Currently, copper prices are significantly affected by factors such as tariff policy and geopolitics, but the core determinant of the price central value remains the physical supply-demand landscape. On the demand side, investment in AI-driven data center construction, grid upgrades, energy transition, and the defense and military sectors is expected to grow continuously, driving global copper demand to expand. On the supply side, constraints such as concentrated resource endowments, long mine development cycles, and declining ore grades will continue to limit the release of new supply. According to S&P Global forecasts, the refined copper market will still maintain a tight balance around 2030, while the supply gap may widen further after 2030.

Finally, in a series of reports such as "Kondratiev Waves, Technological Revolutions, and the Reshaping of the Monetary System," we pointed out that the world is currently still in a Kondratiev winter. Based on historical experience, ending the Kondratiev winter may require systemic deleveraging, including but not limited to two paths: 1) War shocks. 2) The bursting of asset bubbles. Currently, global geopolitical risks are still intensifying, and the end of the Kondratiev winter may still require one more round of effective deleveraging. If the global economy and some assets complete deleveraging around 2027-2028, the world may enter a new Kondratiev wave around 2029-2030. This could usher in an era of "shifting from virtual to real," with liquidity returning to the real economy.

Overall, in the short term, copper prices will still be disturbed by expectations of marginal liquidity tightening and geopolitical factors. However, looking at a 3-5 year horizon, a rise in the central value of copper prices remains anticipated.

Source of this article: CMB Macro Jing Si Lu

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