Copper has long been known as "Doctor Copper" due to its extensive applications in various fields including construction, home appliances, electronics, and automobiles. Copper prices are regarded as a barometer of global economic activity. As a major manufacturing country and the largest copper consumer in the world, most of China's manufacturing products and infrastructure projects require copper. Recently, copper prices have been fluctuating continuously, attracting widespread attention.

Continuously rising

Statistics show that since March, domestic and international copper prices have accelerated in their rise. According to data, as of March 26, Beijing time, the price of the New York copper main contract was $5.293 per pound (approximately $11,671 per ton), with a year-to-date increase of over 31%. On March 25 local time, the New York copper main contract reached a historical high of $5.374 per pound. London copper prices have also risen steadily, hitting a year-to-date high of $10,164.5 per ton during trading on March 26.

On March 26 in China, the main contract for copper futures in Shanghai reached a high of 83,320 yuan/ton, marking a new high since the end of May 2024. As of the closing on that day, the contract had accumulated a rise of 6.55% since March.

Previously, media reports cited sources saying that the U.S. might impose tariffs on imported copper within a few weeks, earlier than the deadline for making a decision by several months. The sources indicated that in February, President Trump instructed the U.S. Department of Commerce to investigate the possible tariffs on imported copper and submit a report within 270 days. The sources revealed that the copper tariff investigation seems to be merely a formality, as Trump has repeatedly stated his intention to impose tariffs on copper. The Trump administration is conducting a rapid review and may reach a conclusion before the 270-day deadline.

Trump has stated that he wants to impose tariffs of up to 25% on all imported copper, and analysts believe that this move could disrupt the global market. The significant price gap between London and New York has led global traders and dealers to rush to transport this red metal to the United States to earn a premium. This action has resulted in a copper supply shortage in other parts of the world, particularly in the largest consumer country, China.

Analysts from Goldman Sachs and Citigroup previously indicated in a letter to clients that they expect the United States to impose a 25% tariff on copper by the end of the year. Several large traders, including the world's largest copper trading company Trafigura, have stated that copper prices could rise from the current approximately $10,000 per ton to $12,000 per ton.

Supply does not meet demand.

From the perspective of supply and demand, the current situation for copper is one of supply not meeting demand. Data from the International Copper Study Group (ICSG) shows that in 2024, the growth rates for global primary refined copper production and consumption are 4.7% and 2.9%, respectively, both higher than the 2.4% growth rate for mined copper. Analysis suggests that the recovery of the global economy and the transition to green energy are driving sustained increases in copper demand, with industries such as new energy and electronics requiring large amounts of copper.

It is worth mentioning that the currently booming AI industry globally also requires a large amount of copper for its AI data centers. Morgan Stanley pointed out in a report that as AI technology rapidly develops, the demand for copper will significantly increase, with AI data centers becoming a new growth point for copper demand. From 2024 to 2027, the global demand for electricity from AI data centers is expected to grow at a compound annual growth rate of 18%. The copper demand for AI data centers may increase from 200,000 to 500,000 tons annually in 2023 to 500,000 to 1.2 million tons by 2027, with a compound annual growth rate of 26%. This will drive copper prices upward and have profound effects on the global copper market. The renowned mining company BHP expects that by 2050, copper demand will increase by 70% compared to 2021.

Is the air conditioner the first to bear the brunt?

The fluctuations in copper prices will affect various industries, including the home appliance industry.

CITIC Securities research report believes that the recent expectations for increased tariffs on copper imports in the United States have been rising, with COMEX copper prices reaching a new high in the price difference compared to LME prices. Strengthened tariff expectations may lead to a short-term supply gap in the U.S. that is difficult to resolve, and the sustainability and extent of COMEX trading are expected to be continuously validated. The U.S. tariff increases may have limited suppression on our demand, but could instead restrict our imports of refined copper and scrap copper. Coupled with frequent positive policy signals, the trading and fundamental aspects are accelerating to resonate, making it possible for copper prices to challenge previous highs.

Goldman Sachs' report believes that as the world's largest copper consumer, China's policy direction has a profound impact on the copper market. China's stimulus policies in sectors such as home appliances and electric vehicles (EVs) will significantly boost copper demand. The report predicts that China's stimulus policies will increase copper demand growth by 2 percentage points, while tariffs will only decrease demand by 0.8 percentage points.

An industry insider in the home appliance sector analyzed that fluctuations in copper prices will first impact air conditioners. Relevant data shows that copper costs account for 22% of air conditioner costs, 9% of refrigerator costs, 10% of washing machine costs, and 14% of range hood costs.

According to data from Aowei Cloud Network, the total production of the air conditioning industry in April 2025 will reach 24.29 million units, a year-on-year increase of 11.8%. The domestic production scale will reach 13.31 million units, with a year-on-year growth of 11.1%; export production will exceed 10 million units, reaching 10.98 million units, with a year-on-year increase of 12.7%. In this regard, Aowei Cloud Network analyzes that the current prices of raw materials, such as copper, in the air conditioning industry are on the rise. For air conditioning manufacturers, stocking up in advance has become an effective strategy to cope with rising costs. By increasing the inventory of raw materials, they can lock in costs for a certain period and avoid excessively high production costs caused by the continuous rise in raw material prices. Aowei Cloud Network believes that the continuous increase in copper prices, coupled with the fact that the aluminum substitution effect has not yet formed an effective scale, will further intensify the cost pressure in the air conditioning industry chain.

It is worth noting that analysts believe that with factors such as trade-ins, air conditioning brands have been taking frequent actions since 2025, and the "undercurrent" of the air conditioning market this year may be more intense than in previous years.