By Pratima Desai
LONDON (Reuters) -Copper consumption in the United States and India is set to emerge from China’s shadow over the next decade as demand growth in the world’s largest consumer of the industrial metal slows.
Beijing’s industrial and infrastructure expansion has helped fuel a rally that has seen copper prices rise to above $10,000 a metric ton from $1,500 25 years ago.
But while China is forecast to remain the largest market for copper into the next decade and beyond, analysts expect other demand and price influences to increasingly come into play.
Changing regional policies, infrastructure cycles and geopolitical shifts are likely to mean producers, consumers, traders and investors need to adapt to a market that has many different drivers.
“China will reduce its rate of copper consumption and stockpiling. We are going back to old-fashioned drivers of copper, which is basically replacement cycles outside China,” said Panmure Liberum analyst Tom Price.
The impact has yet to be seen, but moves by the U.S. and other countries to promote local manufacturing also mean China’s export machine and manufacturing activity is expected to slow and weigh on its demand for refined copper, which is estimated at around 15 million tons this year.
Meanwhile, the data centres needed to support AI technology and upgrades to power grid infrastructure mean copper demand growth outside China will become the driving force for prices.
“China has built its infrastructure, including its power distribution grid. Its activity will drift to a lower level to match (its) requirement,” said Price, who forecasts Chinese demand will be 6% lower in 2031 than in 2026.
Price predicts China will account for 52% of global consumption of primary copper, at around 27 million tons, in 2031 compared with 57% in 2026.
And he expects U.S. copper demand of 2.2 million tons in 2031, up nearly 50% from 2026, while for India, he forecasts copper demand to rise above 1 million tons, representing a rise of more than 30%.
‘INCREASING PUSHBACK BY COUNTRIES IN THE WEST’
Analysts also expect U.S. President Donald Trump’s imposition of 50% tariffs on copper pipes and wiring to help encourage local production.
For China, the likely outcome is the loss of a major market for its exports of copper pipe. Trade Data Monitor ranks the U.S. as China’s fourth biggest market for the product.
Last year, it imported 14.4 million tons of copper tubes and pipes directly from China and in the first seven months of this year these totalled some eight million tons, TDM data shows, underlining the potential loss of a major market for Beijing.
