The global copper market has rallied sharply in 2026. On 14 January 2026, LME three-month copper briefly touched the range of USD 13,200-13,400/t, hitting a record high, which far exceeded the previous peak of USD 10,845/t set in March 2022. SHFE front-month copper settled at CNY 105,400/t, up about 22% from its 2025 low. Supply-demand gaps, booming emerging demand and geopolitical factors strain downstream sectors like lead-acid batteries, weighing on industrial chain costs.

Supply-Demand Imbalance: The Clear Logic Behind Rising Copper Prices

The surge stems from supply-demand factors, not short-term speculation. Global copper mines face shortages: Chile and Peru supply 57% of the world’s copper, but strikes, low ore grades and delayed projects limit supply growth. Net new mine supply in 2026 is estimated at 550,000 t, falling short of rising demand.By mid-January, LME copper inventories had fallen to 155,000 t, a 14-month low, while spot copper-concentrate TC was quoted around minus 30–45 USD/t, a record low level. Mine disruptions (strikes, operational issues) further worsen supply tightness.Booming demand fuels gains. NEVs use 80-85kg copper per unit (4-5x traditional cars), and the 22–23 million EVs expected to be sold this year will add roughly 1.5 Mt of copper consumption.AI data centers are major new consumers, with PV, wind and UHV grids also boosting demand. These emerging needs have driven copper to a historic high in early 2026.

Industrial Chain Spillover Effects: Lead-Acid Battery Industry Under Pressure

Soaring copper lifts lead-acid battery costs (copper terminals/wires are core). Tight pre-Spring Festival logistics (suspensions from Feb 3) further hike transport costs.Since 16 January, major producers have lifted ex-works prices by 1.5–2 yuan per unit on 12–20 Ah blocks and 3–4 yuan on 32 Ah and larger types. The cost pressure passes to the terminal market, squeezing the profits of small and medium-sized enterprises (SMEs).For foreign trade firms, higher copper prices hurt export competitiveness. Germany’s battery EPR fee must be renewed annually by 31 December; the 2025 cycle was closed on that date, adding about 0.6–0.8 % to landed costs and complicating inventory and risk control.

Institutional Divisions and Industry Response Strategies

Institutions hold divided views on the outlook: UBS predicts 2026-2027 copper concentrate shortages; some investment banks, including BMO and StoneX, believe prices may pull back to the USD 10,000-11,000 range as policy premiums dissipate, while Citi flags January as a possible annual peak given current tightness.Current supply tightness partly reflects bets on U.S. tariff policies. Traders have shipped copper to the U.S. since last July, straining supply in non-U.S. regions, and U.S. tariff trends will be a key inflection point for prices.Enterprises counter with long-term supply deals to lock prices, plus tech upgrades or alternatives to cut copper use.Foreign trade firms should plan orders/inventory per market forecasts, complete annual EPR renewal on time, and use scrap copper recycling to save costs.Q2 2026 is a sentiment turning point. Tariffs, supply/demand will guide prices; battery firms must track markets and optimize cost control.

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