The price of copper breaking through the roof step into a correction trajectory? The market is hotly discussing whether copper will replicate the "high places are cold" of gold.

The unprecedented AI boom has led to a surge in copper demand, while market concerns about global copper supply and hopes for a positive trade agreement between China and the United States have significantly driven up international copper prices - LME copper trading prices broke their previous historical high on Wednesday to reach a record high price. However, some analysts are beginning to question the sharp rise in copper prices in the short term: in the absence of long-term and sustained demand recovery, how far can this record-breaking surge go, and will there be a significant correction after a period of irrational price increases. LME copper prices, considered a global economic bellwether, have risen by over 27% year-to-date, with the majority of the increase occurring in the past month. The strong rise in copper prices is also benefiting from the continued weakening of the US dollar index (DXY) this year, making it cheaper for investors holding other currencies to buy metals such as copper. The global interest rate decline led by the Federal Reserve and the European Central Bank is also a core driver of copper prices. Copper is widely used in various fields such as electricity, construction, industrial machinery, transportation, and communication, which are the core of global economic activities. Therefore, when governments implement policies to promote economic growth, and new engines for global economic growth such as artificial intelligence and energy transformation lead to capacity expansion, industrial production and infrastructure construction will significantly increase the demand for copper, thus driving up copper prices. Conversely, when economic expansion stagnates or falls into a recession, and the global economy lacks new momentum, the demand for copper sharply decreases, and copper prices usually plummet rapidly, hence the nickname "Dr. Copper." In the era of artificial intelligence and digital transformation, the construction of data centers is experiencing explosive growth in demand for copper. The high-speed interconnection systems for power transmission and computing clusters of large AI data centers being built by Microsoft, Google, Amazon, and Meta, as well as cooling systems and high-performance electronic devices, are highly dependent on copper. This structural new demand is gradually becoming the new growth engine for the copper market. "The positive prospect of China and the US reaching a trade agreement provides a new catalyst for the rise in copper prices." Ewa Manthey, a senior analyst at ING, said, adding that the institution expects a more tense supply-demand balance in the copper market this year and in 2026; like many investment banks and brokers, ING anticipates a supply shortage in copper by 2026. Miner and commodity trading giant Glencore followed its competitor Anglo American Resources Group on Wednesday, reporting a decline in copper production for the first nine months of 2025 and lowering its full-year production guidance, adding to the list of major trading companies facing squeezed output. The trading price of this natural red metal surpassed its 2024 peak, reaching $11,200 per ton. The benchmark copper price on the London Metal Exchange (LME) briefly rose 1.5% to $11,200 per ton in intraday trading, earlier breaking its previous record high of $11,104.50 in May 2024. The current LME copper price is $11,190.50 per ton. The International Copper Study Group (ICSG) stated this month that a shortage of approximately 150,000 tons of refined copper is expected in the market next year, with total consumption expected to be around 28.7 million tons. However, senior analyst Tom Price from Panmure Liberum believes that the main driving factors behind the recent rise in copper prices - the alleviation of global trade tensions and market expectations for a Fed rate cut - are largely priced into current trading prices. "Therefore, I think some investors may choose to exit because of the lack of new drivers in the short term, and also come back to this reality: the demand expectations for copper haven't actually changed much," analyst Price said. Panmure Liberum expects a slight surplus of 80,000 tons in the copper market next year. Nitesh Shah, a commodity strategist from WisdomTree, said that speculative bets in the futures market tend to cool significantly after becoming overly prevalent. "This may also be the case in the futures market here. We have indeed seen such short-term drastic corrections in the two major precious metal trading markets, gold and silver." For example, the futures trading price of gold has risen by about 52% year-to-date, but the current price has fallen significantly by about 10% from the record high of $4,381.21 per ounce set on October 20, reflecting the potential for a significant correction in the short term after a period of irrational fervent rise in metal futures prices. International gold prices (including gold futures and spot prices) have been steadily rising this year, particularly in the past few weeks. Last Monday, gold prices once again hit a historic high. However, on Tuesday last week, market bullish sentiment towards gold and silver suddenly reversed, and international gold prices experienced a historic drop, with spot gold prices intraday falling by as much as 6.3%, the largest single-day drop since April 2013, ultimately closing down by 5.3%, while December gold futures on the New York Mercantile Exchange fell sharply by 5.7% on the same day, also marking the largest single-day drop in 12 years. Goldman Sachs, the Wall Street financial giant, stated in a report earlier this month that due to the possibility of short-term market oversupply not being ruled out, copper futures prices for 2026/2027 are expected to fluctuate within the range of $10,000-$11,000 per ton, although the long-term outlook for copper prices remains positive.