Copper in 2025: Navigating a tightrope between surging demand and constrained supply

Copper, often called the “metal of electrification,” is at the heart of the global transition to a greener, more connected future. In 2025, the copper market is experiencing a complex interplay of rising demand, constrained supply, and geopolitical uncertainty, creating a volatile yet opportunity-rich landscape.

Global copper demand is projected to grow by approximately 2% in 2025, continuing a steady upward trend driven by the expansion of renewable energy, electric vehicles (EVs), and digital infrastructure.

Asia—particularly China and India—accounts for nearly 74% of global copper consumption, fuelled by urbanization, industrial growth, and clean energy investments.

As of 2025, China alone accounts for over 50% of global copper consumption. This staggering share means that even minor shifts in Chinese demand or supply can send ripples across global markets. Whether it’s a surge in infrastructure spending or a slowdown in real estate, the world watches China’s copper moves closely.

Several factors are fuelling China’s renewed copper appetite. An important factor is the massive government led investments post pandemic in green energy, transportation, and housing which are copper intensive. China’s EV production is accelerating, with copper being a key component in batteries and wiring. These trends have led to a resurgence in copper imports, tightening global supply and elevating prices.

Interestingly, China is not just a consumer, it’s also a major refiner and recycler of copper. When domestic smelting capacity is constrained or environmental regulations tighten, China increases imports of refined copper, further straining global supply chains.Conversely, when China ramps up domestic production or releases strategic reserves, it can cool global prices. This dual role gives China an outsized influence over both ends of the copper trade.In addition, demand for copper from North America is seeing modest growth (3.1% forecast for 2025), with increased investment in grid hardening, solar and wind power, and data centres. Demand from Europe is expected to grow by 1.2%, though demand remains relatively flat due to economic uncertainty and high interest rates.

Despite these gains, some sectors like construction and EVs have shown signs of slowing, especially in mature markets, tempering overall demand acceleration.

While demand surges, the supply side is struggling to keep pace. Several factors are contributing to a tightening copper supply:

Global copper mine production is expected to peak at 23.5 million tons in 2025–2026. However, thereafter, a decline in production is expected due to falling ore grades, aging mines, and limited new project development. Resource nationalism, trade restrictions, and labour unrest in key producing countries like Chile and Peru are disrupting supply chains.

Also, stricter environmental standards are delaying or halting new mining projects, especially in regions with high ecological sensitivity.

Looking ahead, in 2025, copper stands at a pivotal juncture. While demand continues to rise on the back of electrification and green energy, supply constraints pose a significant challenge. Due to growing supply-demand imbalance, global copper market may face significant deficits if new supply sources are not developed.

On the price side, short term trend remains volatile, influenced by macroeconomic factors such as inflation, interest rates, and currency fluctuation. However, the long-term outlook remains bullish due to upbeat demand prospect from developing countries and a possible fall in production.

(The author, Hareesh V is the Head of Commodities at Geojit Investments)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)