A resonance driven by the triple demand of artificial intelligence, power infrastructure, and new energy is being clearly conveyed to the global market through copper prices.

Copper, a metal with both industrial and financial properties, is being given the status of "new oil", and its strong price increase is also being transmitted to lithium, cobalt, nickel and other lithium energy metal sectors.

The most clear signal recently is that the AI craze is rapidly shifting from algorithms and models to capital expenditures on infrastructure.

Statistics show that the scale of US capital expenditure in the AI field has exceeded the peak investment in the telecommunications industry during the Internet foam. At the same time, the investment in newly started data centers is rapidly approaching that of traditional new office building projects, indicating that the AI infrastructure boom has already landed.

This construction boom has directly driven the demand for core raw materials, especially energy metals, and pushed up their prices.

Copper: "Easy to rise but difficult to fall" under supply shortage and demand explosion

The copper price has entered a new channel of "easy rise but difficult fall", with the core logic being that the old pattern of oversupply has been completely leveraged.

The sustained tension on the supply side and the structural outbreak on the demand side together form a solid foundation to support prices.

On the supply side, a series of "black swan" events have severely impacted the already tight market. At the end of September, copper mining giant Freeport McMoRan announced that its Grasberg copper mine in Indonesia had suspended production due to a mudslide accident and activated a force majeure clause on the supply contract.

Grasberg is the world's second-largest copper mine in production, and this shutdown is expected to result in a 35% decrease in its 2026 output compared to the original plan, and may cause a global copper supply loss of approximately 500000 tons in the next 12 to 15 months.

The industry sees this event as a key disturbance that changes the supply-demand balance. In addition, two other world-class copper mines have also experienced production interruptions.

The world's largest underground copper mine, El Teniente in Chile, has experienced a reduction in production due to an earthquake; The Kamoa Kakula copper mine in the Democratic Republic of Congo has also lowered its production guidance for 2025 after the mining earthquake.

According to institutional estimates, these three accidents alone could lead to a reduction of approximately 6% in global copper production by 2025.

The deeper structural bottleneck lies in the global decline in the grade of old mines, while new mines are scarce and have long development cycles.

For example, the grade of copper ore in major producing countries such as Chile and Peru has decreased from about 1.5% in 2000 to the current 0.8%. The average development cycle of a new copper mine is as long as 17 years.

Goldman Sachs predicts that the average annual growth rate of global copper mine supply is expected to be only around 1.5% between 2025 and 2030.

At the same time, China's copper smelting industry is facing the dilemma of processing fees falling to historical lows, and smelters have shown signs of reducing production under the pressure of losses.

The China Nonferrous Metals Industry Association has also suggested to relevant national departments to strictly control the addition of copper smelting capacity, which may further exacerbate future supply shortages.

At the same time as the supply side tightens, there is a concentrated outbreak of demand in multiple emerging fields. The demand structure for copper is shifting from relying on real estate in the past to being driven by AI data centers, power grid upgrades, and new energy vehicles.

Just as oil once supported the entire industrial era, copper is becoming a key material to support the energy and technological revolution of the digital age - this is the core logic behind its selection as the 'new oil'.

Electricity infrastructure is the main driving force behind the growth of copper demand. The exponential demand for computing power in AI relies on energy intensive data centers, which require stable and powerful power grid support. Copper, with its excellent conductivity, has become the core link connecting this chain.

In the data center field alone, approximately 5 tons of copper are required for every megawatt of power capacity.

The International Energy Agency predicts that by 2030, global investment in the power grid will grow at an average annual rate of 9% -10% to address aging issues and new demand.

Goldman Sachs' calculations are more aggressive, believing that by 2030, the power grid and power infrastructure will contribute about 60% of the global copper demand growth.

The new energy sector is also an important engine of demand. According to Goldman Sachs data, the copper consumption of each electric vehicle is five times that of traditional fuel vehicles.

With global electric vehicle sales expected to exceed 40 million units by 2025, photovoltaic and wind power will add over 1.5 TW of installed capacity, which alone will bring in over 3 million tons of new copper demand.

In terms of financial attributes, copper prices are highly pegged to the US dollar, and their trend is also being boosted by gold and silver. Against the backdrop of increasing global geopolitical uncertainty and relatively weak US dollar credit, gold and silver are sought after by central banks and investors as safe haven assets.

The current price of gold futures has both broken through the $4000 per ounce mark, and silver is also accelerating its rebound. In this context, the financial properties of copper are once again being focused on by the market.

Wall Street reacted quickly to this. Since September, several top financial institutions including Goldman Sachs and Citibank have successively raised their expectations for copper prices.

The market generally believes that $10000 per ton will be a new starting point for copper prices, and Citibank even predicts that copper prices may reach $12000 in the second quarter of 2026.

Ripple effect: Energy metals collectively follow the rise

Driven by the strong performance of copper prices, other energy metal markets such as lithium, cobalt, and nickel have also shown positive responses.

After a long-term adjustment, the lithium market rebounded, and on the first trading day after the holiday, leading stocks such as Ganfeng Lithium recently hit the daily limit up.

Fundamentally, the battery production plan for October increased by 10% month on month, and the strong demand in the energy storage sector is structurally improving the overall demand in the lithium market.

However, uncertainty on the supply side still exists. The rectification of lithium mines in Yichun, Jiangxi, which has received much attention, has not yet been finally implemented. The continuous shutdown of the Jianxiawo mining area under Ningde Times has affected some of its joint venture smelting capacity.

The cobalt and nickel markets have also been boosted by supply disruptions. From the end of September to the beginning of October, the cumulative increase in domestic spot cobalt prices exceeded 15% in just a few trading days. The average price of spot cobalt in the Yangtze River rose rapidly from 337000 yuan/ton on September 29th to 355000 yuan/ton on October 9th.

Nickel prices have also experienced a rebound trend. After the holiday, the main contract price of Shanghai nickel continued to rise.

The disturbance of cobalt prices on the supply side mainly comes from the newly implemented quota system in the Democratic Republic of Congo, while the core variable of nickel prices in the future lies in Indonesia's mining policy. Any news about export quotas or environmental rectification may trigger severe market fluctuations.

In addition, there are reports that CATL may launch a new generation of high nickel ternary batteries to meet the demand for high-capacity battery packs in extended range and plug-in hybrid vehicles. This trend will boost support for long-term demand for cobalt and nickel.

The expectation of a rise in copper prices is also triggering chain thinking in the market. In some fields, the call for "replacing copper with aluminum" has resurfaced. What is worth paying attention to in the lithium battery industry chain is that the high copper price may open up new opportunities for new material technologies such as composite current collectors, thereby posing challenges to traditional copper foil and aluminum foil.