Copper’s breakout above US$11,700 a tonne in mid-December — and its quick rebound the following week after a brief round of profit-taking — has revived an old debate in commodities circles: is this a temporary overshoot, or the first clear signal that the world is entering a multi-year period of copper scarcity?
On Christmas Eve, copper hit a fresh all-time high above US$12,000 a tonne as severe mine outages and trade dislocations tied to US President Donald Trump’s tariff agenda put the key industrial metal on track for its biggest annual gain since 2009.
Prices climbed 2% to US$12,159.50 a tonne on the London Metal Exchange, extending a rally that has lifted copper by more than a third this year.
As of Tuesday, December 30, 2025, the price of copper is approximately $12,306.
For international financial analyst Tariq Al-Rifai, the answer to the scarcity issue lies far beyond the daily charts.
“‘Doctor Copper’, as we know, is a barometer for global economic activity,” he said, adding that the same factors are at play as helped silver’s recent run to fresh records: electrification is rewriting the demand profile of metals that long behaved like industrial workhorses. This shift has seen the solar industry become the largest buyer of silver.
“Copper is experiencing the same thing,” Al-Rifai said. “A lot of these EV and electric charging stations, etc., are driving up demand for copper, as well as construction. And of course, we cannot forget about China, which has been the main consumer of copper for many years.
“So, with all this growth in demand, we’ve now seen a shortage develop in the copper market, and that is really what is behind the rise in the price.”
Even after the headline-grabbing highs, the market remains tight. Investors, Al-Rifai said, “are worried about enough supply for the next few years,” and that anxiety translated into “higher and higher prices” leading to last week’s record.
Demand keeps rising while supply underwhelms
Copper demand is expanding on several fronts at once. Electric vehicles require several times more copper than internal combustion cars; grids undergoing modernisation need heavy-gauge copper wiring to maintain stability; solar, wind and battery installations use copper extensively across transmission, inverters and cabling. These are structural, policy-backed industries — not cyclical swings in manufacturing.
“Right now, what we’re seeing is the new developments or new sources of copper, but we’re not seeing so many of them come to market,” Al-Rifai said. “Meaning, new mines develop, new mines open. And I think that’s where you’re going to see a good opportunity.”
Meanwhile, Morgan Stanley expects the market to face its most severe deficit in more than two decades, projecting a 590,000-tonne shortfall in 2026 that could nearly double to 1.1 million tonnes by 2029. And S&P Global forecasts a 25% decline in average ore grades this decade — a structural drag on supply even before accounting for water constraints in Chile, political risk in Peru, or slower project permitting globally.
In a sense, the world is living with the consequences of a previous downcycle. Exploration spending collapsed in the mid-2010s, and many of today’s discoveries or mid-stage developments will not meaningfully contribute before the 2030s. Even projects viewed as high priority under electrification agendas face multi-year timeframes to reach either approval or construction.
China remains the swing factor
Copper’s price elasticity has often hinged on China, and that remains true in 2025.
“Copper demand has been strong for many, many years,” Al-Rifai noted. “Even with an economic slowdown, you still saw China pick up any slack in demand from Europe, US, etc.”
Even with broader global uncertainty, China’s consumption floor has remained high, meaning a genuine supply shortage materialises much faster than in past cycles.
ASX names: Where investors may find leverage to the trend
Australia is not a giant in copper production on the scale of Chile or Peru, but it remains a major global producer with an unusually stable regulatory environment. For investors seeking exposure to the structural deficit, that matters.
“The largest copper producer in the world by far is Codelco, the Chilean mining company,” Al-Rifai noted, “but Australia is one of the top ten copper producers in the world. And BHP Group Ltd (LSE:BHP, ASX:BHP) is a well-diversified mineral and mining producer in Australia, with mines all over the world.”
Still, for investors wanting more direct leverage to the tightening market, he points to the development end of the sector.
“If you want something more interesting and that has a strong future outlook, investors are looking at development of new mines,” he said, highlighting three examples in Australia:
- Stavely Minerals Ltd (ASX:SVY): Working to develop an existing mining operation in Victoria, Stavely’s Cayley Lode discovery has been closely watched by industry and investors looking for shallow, high-grade systems with relatively short development pathways.
- Cyprium Metals Ltd (ASX:CYM, OTC:CYPMD): “I think Cyprium is probably one of the more interesting plays,” Al-Rifai said, “because they are closer to production than many of the others.” The company is advancing restart plans at the Nifty Copper Project — a brownfields asset with infrastructure already in place.
- New Frontier Minerals Ltd (ASX:NFM): For investors comfortable with higher risk in exchange for higher upside, New Frontier represents an earlier-stage case.
Beyond these, the broader ASX copper cohort — from major producers to emerging explorers — tends to experience valuation uplift whenever long-term copper price assumptions move higher. With several majors forecasting a multi-year structural deficit, those assumptions are beginning to shift.
A bull cycle years in the making
The short-term news flow around copper is noisy: Chinese economic data, US inflation numbers, manufacturing indicators and geopolitical headlines all move the market day to day. Al-Rifai, however, does not get distracted by the noise.
“I don’t look at the daily charts; I don’t look at the monthly charts,” he said. “I look at longer-term trends, and the long-term trend for copper, if you go back 10 years — it’s a nice steady line going up.”
Al-Rifai extends that thinking more broadly, too.
“I believe that metals in general, but especially if you’re talking copper, silver, platinum or gold, are on a long-term bull run,” he said. “I think we’re just now beginning to see this long-term bull run.”
That sentiment is echoed by several global forecasts. The International Energy Agency expects energy-transition sectors to account for more than a third of copper demand growth by 2030. Goldman Sachs recently estimated that data-centre expansion linked to AI could triple copper demand from hyperscale infrastructure by the end of the decade. And multiple governments — from the US to Japan to Europe — have prioritised copper-heavy grid and renewables investment through policy incentives.
These are not conditions that dissipate with a single rate cut or a quarter of stronger industrial output. They are multi-year capital cycles with high copper intensity and, crucially, without easy substitutes.
What the next phase may look like
Copper’s rally will encounter intermittent corrections, as all bull markets do. But unless the supply side accelerates meaningfully — and quickly — analysts expect the deficit to persist through the second half of the decade.
For ASX developers, the environment is unusually constructive: rising prices strengthen project economics, improve access to funding and heighten takeover potential. For explorers, discoveries could command premium valuations amid a tightening global pipeline of new deposits.
As for the price outlook, Al-Rifai argues the structural deficit is already shaping the trajectory. “Long term, it’s headed upward,” he said. “And I think that goes without saying for some other metals as well.”