As of Thursday, June 25, social copper inventories in major regions of China increased by 11,700 mt WoW to 206,000 mt, while regional inventory trends diverged significantly. Copper price pullbacks have spurred a recovery in downstream purchasing demand, and coupled with ongoing adjustments in the market's supply-demand pattern, inventory performance varied across regions. By region, inventory trends in China's key copper consumption areas showed pronounced divergence. In Shanghai and Jiangsu, the two core markets, inventories pulled back in tandem, signaling a notable recovery in demand. Recently, domestic copper prices fell sharply, with lower prices effectively stimulating downstream enterprises' restocking willingness. In Shanghai, buoyed by favorable prices, downstream purchasing activity increased significantly, continuously drawing down spot inventories; meanwhile, combined with relatively low regional arrivals in the prior period, the market maintained a destocking pattern. Jiangsu's market situation was largely in line with Shanghai's—falling copper prices prompted end-users to concentrate on pricing and purchasing, with rigid-demand orders released intensively, effectively driving steady destocking of regional inventories and markedly improving spot market liquidity. In stark contrast to Shanghai and Jiangsu, inventories in Guangdong continued to climb, becoming the main drag on the national inventory increase. According to market analysis, as the year entered the mid-year phase, consumption by downstream copper semis enterprises in Guangdong gradually slowed, end-user order growth pulled back, and overall willingness to purchase remained weak. Meanwhile, domestic smelters accelerated their shipment pace, concentrating deliveries into Guangdong warehouses, driving a significant increase in regional arrivals. Under the dual impact of weakening downstream consumption and concentrated inflows of upstream supply, copper inventories in Guangdong continued to accumulate. Looking ahead, China's copper market will see structural adjustments on both supply and demand sides in the short term, with a destocking trend essentially in place. On the supply side, the domestic copper cathode market has recently seen somewhat looser supply, with port arrivals of imported cathode steadily rising. Meanwhile, domestic smelters have maintained steady production and shipment pace, with domestic supply arrivals continuing to increase, resulting in ample overall spot supply. The outlook for demand improvement is more definitive. After this round of sharp copper price declines, downstream enterprises' cost pressure has eased significantly. Coupled with previously accumulated orders on hand awaiting execution, market stockpiling sentiment continues to recover, and end-user restocking demand for rigid needs is set to be released intensively, continuously consuming spot cargo circulating in the market. Overall, the current domestic copper spot market is characterized by a favorable pattern of "ample supply and recovering demand," with downstream restocking momentum sufficient to offset pressure from short-term new supply. SMM expects that next week, national copper social inventories will shift to a destocking pace, and overall inventories are likely to pull back steadily. Going forward, the market should closely monitor the magnitude of copper price fluctuations, the sustainability of downstream purchasing intensity, and the pace of imported supply arrivals.

"The heatwave has significantly driven sales growth, especially the PortaSplit air conditioner, which has sold out in some sales channels."

This week, the macro narrative shifted from geopolitics to monetary policy. On June 17, the FOMC took a hawkish hold, keeping rates unchanged but signaling a bias toward further tightening, with the new Fed Chair Warsh reiterating the commitment to restoring price stability. The US dollar strengthened and rate hike expectations heated up, combined with sluggish traditional copper consumption sectors in China, leaving copper prices under pressure and briefly falling below $6/lb early in the week to a seven-week low. On the geopolitical front, the US and Iran reached a preliminary memorandum of understanding in mid-June. Crude oil extended its decline, with WTI falling below $70/bbl to near pre-war levels, and the earlier geopolitical risk premium largely faded. Mid-week, supported by the delay of full production resumption at Grasberg to early 2028 and dip-buying, copper prices stabilized slightly; late in the week, inflation data released largely met expectations, improving sentiment at the margin. Overall, a hawkish Fed and a strong dollar exerted major downward pressure, while cooler geopolitics eroded supply-side risk premiums, leading copper prices to retreat from highs with a lower center. Fundamentals side, the price pullback activated downstream restocking. After copper prices fell to a seven-week low, downstream dip-buying and restocking orders rebounded notably, with SMM social inventory turning to destocking again; spot premiums remained firm, and demand displayed a price-sensitive pattern of dipping at lows but lacking momentum at higher prices. On the supply side, imported and domestic arrivals were steady, while the approaching month-end delivery caused some disruption to the nearby contract structure. The overall picture reflected price-driven impulse restocking and destocking but a weak consumption base, providing some support to the downside but limited upside momentum for copper prices. Looking ahead to next week, the macro focus will be on the US refined copper tariff ruling on June 30 (which directly affects COMEX-LME spreads and arbitrage flows to ports), along with the progress on the US-Iran agreement and the resumption of navigation in the Strait of Hormuz; the hawkish Fed and strong US dollar will continue to weigh on risk appetite in the near term. Fundamentals side, the Grasberg production resumption delay and dip-buying will provide support to the downside, but weak consumption at higher prices and fading geopolitical premiums will cap upside potential. LME copper is expected to trade at $12,700–$13,300/mt, while SHFE copper is expected to trade at 101,000–103,500 yuan/mt, characterized by sideways movement after retreating from highs, with a weaker center; spot premiums are expected to consolidate at lows, with attention on the tariff ruling and the sustainability of restocking after month-end delivery.

I.AI Computing Power Expansion Opens Growth Space for Copper Global computing power infrastructure and data center construction have seen simultaneous explosive growth, with intensive commissioning of intelligent computing and supercomputing projects across regions, generating an entirely new incremental demand curve for copper semis. According to SMM projections, global new installations is expected to achieve a CAGR of 24% from 2025 to 2030, with the fastest pace of new deployment occurring in 2025 and 2026. New installations in 2026 are expected to grow 65% MoM, and by 2027, the growth rate of new installations is projected to pull back to 28.77%, followed by a year-by-year deceleration in 2028-2030. By region, global new installations of computing power are mainly concentrated in two major markets: the US and China. Leveraging its scale-leading cloud operators, highly efficient facility operation systems, and a well-established global AI industry ecosystem, the US continues to lead in deployment scale. In China, leading cloud producers such as Alibaba and Tencent continue to increase capital expenditure on computing power infrastructure, while the national computing power network is formally incorporated into the top-level planning of the "Six Networks" and the "East Data, West Computing" projects are being rolled out and commissioned in batches, leading to a steady rise in the market share of domestic intelligent computing centers. SMM analysis indicates that the CAGR of new copper consumption for global computing power from 2025 to 2030 is 21%, slightly lower than the growth rate of new installations. The core reason is the gradual release of medium and long-term technological effects that reduce copper usage. Looking at individual years, copper consumption growth is 54.94% in 2026, pulling back to 27.58% in 2027, and the growth of new copper consumption is also expected to exhibit a gradual slowdown trend from 2028 to 2030. II. Unit Copper Consumption in Computing Power Centers Shows a Phased Trend of First Increasing then Decreasing SMM's calculation by region shows that the comprehensive copper consumption per unit of global computing power centers will present a characteristic of first increasing then decreasing from 2025 to 2030. In the short term, new computing power is mainly through the construction of entirely new campuses, with supporting power, grounding, and other infrastructure built from scratch, coupled with high-density cabinets driving a rapid rise in the penetration rate of liquid cooling systems. Multiple factors jointly push comprehensive unit consumption upwards in 2025-2026. In the medium and long term, as 800V high-voltage DC power distribution is popularized at scale, the required thickness and cross-section of copper conductors under equivalent power scenarios will decrease significantly.Meanwhile, high-speed NVLink copper cables will face substitution by fiber optic interconnects. Coupled with the iteration of liquid cooling heat dissipation materials and technological breakthroughs in aluminum as a substitute for copper processes, the industry's comprehensive unit consumption will enter a downward trajectory. However, constrained by the pace of industrial technology penetration, SMM's calculations show no significant decline in unit consumption in 2027-2028, as consumption reduction and copper-increase factors offset each other, keeping unit consumption stable. The downward trend will only become significantly prominent after 2029. It is worth noting that comprehensive unit consumption is a weighted average calculated by SMM based on the deployment scale of computing power in the US, China, and the rest of the world. There is clear differentiation in unit consumption among data centers in different regions, with the unit copper consumption ranked as: Rest of the World > China > US, where the scale effect of large clusters effectively lowers unit copper intensity. III. Breakdown of Core Copper Usage in Computing Power Centers Computing centers fall into three categories: general-purpose IDCs, intelligent computing centers, and supercomputing centers. This article uses intelligent computing centers, which currently hold the highest market share and fastest growth rate, as the calculation sample to break down the copper consumption structure: The power supply and distribution system is the largest copper-consuming segment in a computing center, accounting for 66% of total copper consumption according to SMM calculations. It primarily handles medium- and high-voltage power conversion and ensures uninterrupted power supply for equipment rooms. Medium- and low-voltage distribution cabinets, UPS, and busways are the core copper-consuming equipment. In the short term, high-power cabinets continue to boost demand for copper semis in power distribution, while in the medium and long term, after the popularization of lithium battery UPS and high-voltage DC solutions, unit copper consumption in the distribution segment will trend steadily downward. SMM estimates that AI server hardware infrastructure accounts for 18% of copper consumption, undertaking all tasks of computing power, storage, and network interaction. It integrates core components such as GPUs, motherboards, and server power supplies, and the stable operation of the hardware directly determines the computing power output of the cluster. High-end AI server PCBs and internal interconnection copper wires are the main sources of copper consumption in this segment. The liquid cooling system accounts for 11% of copper consumption. The closed-loop liquid cooling cycle meets the heat dissipation demands of high-power AI chips, with cold plates, CDU heat exchange units, and circulating copper pipe & tube serving as the main copper-consuming components. Liquid cooling penetration during 2025-2026 will boost demand for copper pipe & tube and copper plate/sheet and strip, and once copper-aluminum composite heat dissipation materials mature, the copper intensity for heat dissipation will gradually decline. Network communication, grounding protection, and supporting auxiliary systems together occupy the remaining 5% of copper consumption , covering sub-scenarios such as high-speed interconnection cabling and equipment room grounding and lightning protection copper grids. The current optical fiber interconnection industry chain continues to expand production, with optical fiber enterprises seeing simultaneous improvements in orders and profitability, indirectly confirming the overall high prosperity of AI computing power construction. In the long term, optical fiber will also continue to divert demand from high-speed copper cables. IV. Comprehensive Analysis of the Proportions of Different Copper Semis Breaking down the copper consumption structure of computing centers comprehensively by semi-finished copper product category, cables and copper busbars are the core consumables throughout the construction process. SMM analysis shows that cables account for 40% of the total copper consumption in a computing center, acting as the “blood vessels” permeating every link, with core applications in high-voltage access, low-voltage distribution, power transmission, high-speed communication copper cables, building wiring, as well as grounding and lightning protection cables. Copper busbar (24% of total copper consumption), the "backbone" for high-current power distribution in data centers, is mainly used in high- and low-voltage power distribution cabinets, transformer copper busbars, UPS systems, etc.Copper plate/sheet and strip (17%) is mostly used in transformer windings and liquid cooling cold plate substrates, performing dual functions of power transformation and heat dissipation. Copper pipe & tube (11% of total copper consumption) is a dedicated consumable for liquid cooling systems, mostly used in circulation piping, CDU heat exchange units, and precision air conditioning heat exchange pipes. The large-scale expansion of liquid cooling will boost demand for copper pipe & tube in the short term. Copper foil (4%) covers application scenarios including servers, switches, and various PCB circuit boards. Industry demand is concentrated on HVLP ultra-low profile high-end copper foil. Although the copper consumption per GW is relatively small, the incremental elasticity driven by AI computing power expansion is extremely strong. Currently, copper foil enterprises are accelerating the switch of capacity from ordinary electronic copper foil to high-end HVLP capacity, while copper clad laminate (CCL) producers have full order books and processing fees are being raised continuously, indicating that the prosperity of computing hardware demand has been verified across the entire industry chain. In summary, the rapid expansion of computing centers directly drives the growth in demand for related copper semis. At the same time, high-density AI computing clusters significantly raise the requirements for power supply supporting facilities, and the overall electricity consumption scale of the industry surges simultaneously. The demand for power infrastructure construction derived from computing expansion has become a key focus for long-term tracking and research in the future. While computing demand expands, the industry's development also faces external constraints. Currently, the grid connection approval process has a relatively long queuing period, and the market is generally concerned that transmission, distribution, and generation-side capacity bottlenecks may drag down the implementation pace of computing projects. However, according to SMM forecasts, no substantial power supply gap risk is expected for the industry over the next five years. It will still be necessary to closely track the approval progress and commissioning pace of various transmission and distribution supporting projects. SMM will also continue to follow the relevant industry dynamics and copper demand changes. For detailed data, please contact Cynthia Wang of the SMM Copper Research Team at 15762822325.

The US-Iran interim peace agreement was signed on June 19 in Switzerland — the Strait of Hormuz will reopen, and the improvement in sulfur supply is expected to ease pressure on SX-EW copper smelting in Africa. The pullback in oil prices also indirectly benefits downstream copper consumption.

South America remains the cornerstone of global copper supply, with Chile and Peru collectively accounting for more than one-third of global mined copper production. As electrification, grid modernisation, renewable energy deployment and AI-driven infrastructure investment continue to reinforce long-term copper demand growth, policy developments across the region are becoming increasingly important determinants of future supply availability.

India’s cable and wire industry is expected to achieve around 30% revenue growth in the coming fiscal year, supported by infrastructure investment, manufacturing expansion, and construction activity. Industry groups said higher copper and aluminum prices are increasing costs but also lifting selling prices. Continued investments in grid modernization and renewable energy are expected to drive stronger copper consumption. Analysts see India emerging as a major contributor to global copper demand growth.

[SMM Analysis]: Copper-related Policy Shifts Across the Americas: Copper is no longer merely an industrial metal — it is rapidly emerging as a strategic resource. From mining policy reforms in Chile and Peru, to the U.S. Section 232 investigation and the strengthening of North American critical minerals strategies, copper policies across the Americas in 2025–2026 are set to exert profound influence over global copper supply-demand balances, smelting dynamics, and copper price volatility.

The recent sharp rise in copper prices has been accompanied by several headline trading themes: the widening LME-COMEX spread, record-low copper concentrate TC, the energy crisis in Peru, repeated uncertainty around the restart pace at Grasberg, and the substitution effect between refined copper and copper scrap in China. At a deeper level, however, these events can all be understood through one central theme: the global emphasis on copper resource security is continuing to rise, and the market is repricing the entire copper value chain. Since 2025, the US has continued to strengthen the strategic importance of copper. In its Section 232 investigation into copper imports, the US explicitly included copper, copper concentrates, refined copper, copper scrap and related derivative products within the scope of national security review, and required an assessment of how US dependence on copper imports may affect national security and industrial resilience. Subsequent policy discussions also proposed that part of the high-quality copper scrap generated in the US should be prioritized for domestic sales. Against this backdrop, the COMEX premium over LME is no longer merely a simple screen-traded spread. It has become a price signal through which the US market attracts globally deliverable refined copper resources. If the LME-COMEX spread continues to widen and becomes sufficient to cover transportation, financing, warehousing, delivery and policy risks, it may attract some freely tradable material to the US market. Although this round of trading is different from 2025, the market is already pricing in a wider spread. While market rumors continue to circulate, the COMEX premium has already reflected the US market’s ability to attract resources. Whether this will truly translate into changes in physical trade flows still depends on LME inventories in the US, COMEX inventories and the ratio of cancelled warrants. If US LME inventories decline, the cancelled warrant ratio rises, and COMEX inventories increase at the same time, it would suggest that material may be moving from the LME system into the COMEX system. In that case, the decline in deliverable LME resources could create room for the LME nearby backwardation structure to strengthen. Once LME shifts from contango into backwardation, the impact will further transmit into the LME-SHFE structure. A stronger LME nearby structure would compress China’s import arbitrage ratio and could even reverse the LME-SHFE spread, passively opening China’s export window. On the one hand, a stronger LME structure would raise smelters’ raw material costs and offshore procurement costs. On the other hand, if China’s domestic import ratio remains weak, exports may be forced to recover in order to repair regional price spreads. Under extreme market conditions, it will be necessary to closely monitor LME time spreads, especially the TOM-NEXT spread. If TOM-NEXT strengthens rapidly, it usually indicates that pressure on nearby deliverable resources is rising, and the market may shift from normal spread trading to pricing the risk of a squeeze. For China, the core logic is to secure raw material supply. Copper concentrate TC has fallen to around -$107 to -$103/mt , indicating that miners still hold strong bargaining power and that smelters’ raw material procurement pressure continues to rise. In the short term, high sulphuric acid prices can still partly offset smelters’ margin losses. However, against the backdrop of China restricting or banning some sulphuric acid exports after May, further upside room for domestic acid prices may be limited. If sulphuric acid prices fall while TC remains deeply negative, smelters’ profit structure will become even more distorted. If this is further combined with a weakening LME-SHFE structure and a deterioration in the import arbitrage ratio, smelters will simultaneously face rising raw material costs, processing fee losses and declining by-product revenue. Another key domestic signal is copper scrap. At present, although China’s refined copper social inventory continues to decline under the weakening substitution effect between refined copper and scrap, the sharp increase in copper scrap inventories is also a reality. Affected by reverse invoicing and the fair competition review regulations, tax costs for copper scrap processors have increased. Scrap with invoices has become scarce and is flowing more toward smelters, reducing the actual amount of scrap available to processors and thereby supporting refined copper consumption. However, this support is not without limits. If copper prices continue to rise, the refined copper-scrap spread widens again, and scrap inventory pressure continues to build, the incentive for scrap to substitute refined copper will strengthen. At that point, refined copper demand may decline sharply under the combined effect of high copper prices suppressing consumption and the recovery of scrap substitution, while China’s destocking pace may slow or even reverse into inventory accumulation. The recent market discussions around Peru’s energy crisis and the delayed recovery pace at Grasberg are more emotional triggers under the broader resource security theme, rather than decisive variables that have already changed the current refined copper balance — in other words, they are more of an excuse for the market. The energy issue in Peru has raised market attention to the stability of energy supply for South American mines. As for Grasberg, Freeport Indonesia previously mentioned that full recovery could be delayed until 2028, but Freeport-McMoRan later stated that it still maintained its plan to restore full production by the end of 2027, showing that there is still a gap between market expectations and the actual impact. These events have not caused severe damage to the global physical refined copper balance in the short term. However, against the backdrop of deeply negative TC, China-US resource competition and widening cross-market spreads, any uncertainty at the mine end will be amplified by the market into a supply security premium. Looking ahead, four groups of indicators deserve close attention. First, the LME-COMEX spread, US LME inventories, COMEX inventories and the cancelled warrant ratio. If the spread widens together with a visible transfer of material from LME to COMEX, there is still upside room for LME nearby backwardation. If US inventories remain high, the spread is more likely to stay at the level of policy and financial pricing. Second, LME time spreads, especially Cash/3M and TOM-NEXT. If TOM-NEXT strengthens abnormally, the market should watch for nearby structure risk. Third, China’s refined copper-scrap spread and copper scrap inventories. If the refined copper-scrap spread widens and scrap flows recover, the support to refined copper consumption will weaken. Fourth, TC, sulphuric acid prices and the LME-SHFE ratio. If TC continues to deteriorate, acid prices fall and the ratio weakens, smelters’ operating pressure will rise significantly. Overall, amid the repricing of copper under resource security competition, a price transmission relationship has emerged across COMEX, LME and SHFE, which is the direct driver behind the recent copper price rally. Under the influence of these indicators, capital flows and physical trade flows may be reshaped again. In this environment, securing supply chain stability and cost safety remains a long and difficult process.

French energy technology firm Schneider Electric said it plans to establish a Southeast Asia regional training centre in Malaysia in 2026, as rapid expansion of AI infrastructure continues to drive power demand growth across the region. The data centre capacity in Southeast Asia is projected to triple by 2030. Within this expansion, Malaysia is rapidly positioning itself as a pivotal regional hub for AI infrastructure, attracting investments in recent years from major technology companies including Microsoft, Amazon and Google. Market participants believe rising demand for AI servers, power systems and cooling infrastructure will continue to support regional copper consumption growth, particularly in Johor, Malaysia, which is becoming one of Southeast Asia’s key data centre clusters.