HG MARKETS:

Copper prices retreated, erasing the previous day’s gains, as a stronger U.S. dollar pressured commodities priced in the greenback. The U.S. Dollar Index climbed 0.3% to 98.8, reaching a session high of 98.9, while December copper futures fell 1.4% to $4.96 per pound in U.S. trading.

The reversal in copper prices came after earlier optimism driven by expectations of stronger global demand growth. Analysts now anticipate that the United States and India will emerge as the primary drivers of copper consumption over the next decade, marking a significant shift from decades of Chinese dominance in the market.

China’s rapid industrial expansion and massive infrastructure investments once fueled a historic surge in copper prices lifting the metal above $10,000 per metric ton from around $1,500 twenty-five years ago. However, with much of its infrastructure already built and economic growth moderating, China’s copper demand is expected to gradually slow in the coming years.

While China will remain the world’s largest copper consumer through the next decade and beyond, emerging regional and geopolitical trends are reshaping the global demand landscape. Analysts highlight that evolving industrial policies, infrastructure investment cycles, and political realignments will require producers, consumers, and investors to adapt to a more diversified market, no longer dominated by a single player.

Efforts by the United States and other nations to strengthen domestic manufacturing are expected to further reduce China’s export-oriented industrial activity, leading to a potential decline in its refined copper demand estimated at around 15 million tons in 2025. In contrast, copper demand outside China is projected to grow, fueled by the rapid expansion of data centers supporting artificial intelligence technologies and the modernization of power grids across developed economies.

According to market forecasts, China’s copper consumption could be about 6% lower in 2031 than in 2026. The CRU Group projects China’s share of global mined and recycled copper consumption to decline to 57% of an estimated 31.36 million tons in 2030, down from 59% of 27.62 million tons this year.

While Western nations are investing in modernizing their electricity grids, these projects primarily involve upgrading existing systems a less copper-intensive process than the large-scale construction that drove China’s previous copper boom. As a result, analysts expect future copper demand growth to be increasingly distributed across multiple regions, with the United States and India emerging as pivotal players in the next phase of global consumption.