Copper prices are brewing a storm in silence? Citi predicts: may surge to $12,000 in the next two years.

Currently, the trend of copper prices seems flat and unremarkable, but the market is tumultuous, with more and more views believing that this red metal will see a substantial increase. In the latest release of the "Metal Matters" market analysis report, Wall Street giant Citigroup outlined such a prospect: by the second quarter of 2026, copper prices may rise to $12,000 per ton. This forecast is particularly worthy of attention, as current demand data has not yet shown signs of full recovery. As a barometer of the global economy, copper has long been seen as an important indicator. From the power industry, mechanical manufacturing to renewable energy, this metal is indispensable in many fields. Therefore, the consumption, supply, and price trends of the copper market have always been closely watched. Citigroup believes that the current market is in a "buffer period," which may mask potential structural changes in the coming years. Stable global demand but weak consumption Citigroup cited its own demand indicators in the analysis: global copper consumption in September increased by only about 1% year-on-year. Consumption outside of China increased by about 2%, while China, as the traditional major buyer of basic metals, saw stagnant demand, which directly affected global overall data. The bank expects this weak trend to continue throughout the remainder of 2025. On the one hand, the high base in 2024 restricts growth from a statistical perspective; on the other hand, the industrial sectors of multiple economies are sending signals of weakness, with businesses taking a cautious investment stance due to uncertain circumstances, and production expansion being restrained. However, in Citigroup's view, this weak phase is more of a cyclical phenomenon rather than a fundamental reversal of copper prices. The current copper prices already reflect to some extent the market's expectation that weak demand will not persist. Copper market may face structural bottlenecks from 2026 Looking into the medium term, Citigroup expects changes in the copper market environment. From 2026 onwards, the loose fiscal policy in the United States and more accommodative monetary policy globally will rejuvenate industrial activity. In this scenario, the demand for copper in the electrical and construction industries will further increase, and the demand for emerging sectors such as electric vehicles, energy transformation projects, and artificial intelligence (such as data centers) will also rise simultaneously. On the supply side, Citigroup is concerned about possible bottlenecks that may arise. The complex, capital-intensive, and time-consuming process of building new copper mines, project delays, declining ore grades at existing mines, or regulatory obstacles could all lead to a slowdown in production growth. The bank warns that if supply cannot keep up with the pace of demand growth, the market may be plunged into structural shortages. Analysts believe that when there is a gap between consumption and production, copper prices will be more driven by scarcity factors rather than current inventory and demand data. The forecast of copper prices reaching $12,000 per ton by mid-2026 reflects this view - that copper prices may enter a phase dominated by structural factors. Weakness and arbitrage signals coexist Interestingly, despite the soft short-term data, Citigroup believes that the market has already positioned itself in advance. If market participants bet on a demand recovery, copper prices may diverge from the current subdued physical demand. In this regard, Citigroup mentioned the "bullish U.S. copper arbitrage dynamics" - price differentials between different trading venues and contracts will generate arbitrage trading, thereby increasing bullish positions. This market structure reinforces the perception that the market is in a transitional period, even though current economic data remains cautious. For observers of the commodity market, this situation presents a differentiated characteristic: on the one hand, current indicators show moderate growth in copper consumption, especially in the Chinese market; on the other hand, forecasts from institutions such as Citigroup indicate that in the medium to long term, copper prices will be impacted by a significant increase in demand and restricted supply. Copper remains a key indicator of global economic and structural trends The trend of copper prices perfectly illustrates the dual nature of the commodity market: it must reflect short-term economic fluctuations and also address structural bottlenecks and long-term transformation processes. The market landscape depicted by Citigroup shows that the current calm does not necessarily mean continued weakness, but may instead be an intermediate stage of the market transitioning to a tight balance environment. Copper remains a key reference indicator for evaluating global economic trends. Whether the forecast price of $12,000 per ton by Citigroup can be achieved depends on many factors - from global economic trends to mining supply situations, and political and monetary policy frameworks. However, it can be certain that in the coming years, discussions about copper and its importance in industry and energy transformation will continue to be a focal point of the market.