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Dear folks, copper prices have risen nearly 30% this year, faster than other metals and even gold. Why? In simple terms, there are three reasons. First, the U.S. is going to raise tariffs, which has scared everyone, leading to a frenzy of stockpiling. Second, several major copper mining companies are reducing production this year, creating a copper shortage. Third, large consumers of copper, such as the new energy and AI industries, are all competing for copper. These three forces have made copper the most profitable metal this year, and predictions indicate that copper prices will continue to rise in the second half of the year. In reality, the U.S. is doing something that harms itself. Ironically, the U.S. is a major consumer of copper, with 44% of copper used in the construction industry, 20% in power transmission, and large amounts also used in industrial machinery and automobile manufacturing. However, domestic copper production in the U.S. is only half of its consumption, requiring a significant amount of imports.
Then the price of copper has risen, and the construction costs in the United States have increased by 15%, while the cost of automobiles has risen by 5%, resulting in greater inflationary pressure. For China, the actual impact is also significant. Now that the price of copper has been pushed up by this tariff from the United States, copper miners have gained greater bargaining power and are making demands on smelters. The processing fees for copper and zinc mines have already fallen to negative numbers from the second half of last year to now. In other words, smelters even have to pay miners to obtain the raw ore, essentially losing money just to make noise.
Ultimately, commodities related to copper will rise in price in the future. Why is the United States doing this? Because the United States hopes to influence the supply chain by creating a surge in bulk raw materials, thereby affecting the inflation and monetary policies of various countries. This not only competes for strategic resources globally but also aims to restrict China's development through rising raw material prices. The story of great power competition is just beginning.