1. Soaring prices: Copper and aluminum markets usher in a historic moment
At the beginning of 2026, the global non-ferrous metal market was ignited by the “double record-breaking” prices of copper and aluminum. On January 7th, the main contract of copper futures on the Shanghai Futures Exchange set a new historical record at 105,500 yuan/ton; just five days later, the main contract of aluminum futures followed closely at 25,075 yuan/ton. The overseas market was also in a frenzy: LME copper prices broke through 13,387.5 US dollars/ton, and COMEX copper futures approached 611.25 US dollars, both hitting record highs. Behind this “metal frenzy” lies the resonance of multiple factors – escalating geopolitical risks, accelerating global green transformation, pressure on supply chain restructuring, and fierce competition for strategic resources among international mining companies.
II. Price-driven logic: From supply-demand imbalance to enhanced financial attributes
Supply and demand fundamentals: vulnerability under tight balance
Global copper inventories have fallen to a near-decade low, with LME copper inventories standing at only 120,000 tons, a 45% decrease compared to the same period in 2025. Although aluminum inventories have rebounded due to the release of production capacity in China, the overseas gap in electrolytic aluminum remains. On the demand side, the proportion of copper demand from the new energy industry (photovoltaic, wind power, electric vehicles) has jumped from 12% in 2020 to 25% in 2026, while aluminum’s irreplaceability in lightweight materials further consolidates its rigid demand.
Geopolitical premium: resource security emerges as a new variable
The rise of global trade protectionism and the tightening of policies by resource-exporting countries (such as the increase in royalties for copper mines in Chile and the extension of the ban on bauxite exports in Indonesia) combined with the escalating energy costs caused by the prolonged Russia-Ukraine conflict have pushed the production cost center of copper and aluminum upward. Market concerns about “resource supply disruptions” have shifted from an emotional level to actual premiums.
Financial attribute awakening: copper becomes the “new gold”
In an environment of low interest rates and high inflation, copper’s anti-inflationary properties have been re-evaluated. According to a recent report from Goldman Sachs, the degree of “financialization” of copper has approached that of gold, with global copper ETF holdings increasing by 60% compared to 2025, and speculative capital inflows exacerbating price volatility.
III. Industry transformation: wave of mining enterprise consolidation and battle for pricing power
Rio Tinto and Glencore: A Century Marriage “In the Name of Copper”
On January 9th, Rio Tinto and Glencore announced the initiation of merger and acquisition negotiations. If the all-stock merger is finalized, the market capitalization of the new company will exceed $260 billion, surpassing BHP Billiton to become the global mining giant. The core logic of this transaction lies in copper pricing power: Glencore plans to increase its annual copper production to 3 million tons (accounting for 12% of global supply) through the merger, while Rio Tinto can leverage Glencore’s trading network to strengthen its market influence.
BHP Billiton’s response: from “bystander” to “disrupter”
Facing challenges, BHP Billiton has accelerated the expansion of its copper mine in South America and is considering acquiring the Indonesian assets of Freeport-McMoRan. The global copper mining industry is transitioning from “decentralized competition” to “oligopolistic competition”, with the production share of CR4 (the top four companies) expected to increase from 38% in 2025 to over 50% in 2030.
The role of Chinese enterprises: from “participant” to “rule-maker”
China accounts for over 50% of global copper and aluminum consumption, yet its overseas equity mines account for less than 20%. In recent years, companies such as Minmetals Resources and Zijin Mining have enhanced their resource control through mergers and acquisitions (such as Minmetals Resources’ acquisition of the Las Bambas copper mine in Peru), but there is still a gap compared to international giants. In the future, China needs to adopt a three-dimensional strategy of “resources + technology + finance” to gain a greater say in the pricing mechanism of the London Metal Exchange (LME).
IV. Outlook: “High volatility” in copper and aluminum prices remains the main theme
Short term (2026-2027): Supply disruptions dominate the market
Labor negotiations in major producing countries such as Chile and Peru, extreme weather conditions, and energy crises may trigger periodic supply disruptions, supporting high prices. It is expected that LME copper prices will fluctuate within the range of $10,000 to $13,000 per ton, while aluminum prices will trade within the range of $3,000 to $3,500 per ton.
Mid-term (2028-2030): Demand differentiation and technological revolution
The growth rate of new energy demand may slow down due to subsidy reductions, but emerging fields such as AI data centers and power grid upgrades will take over as new engines of copper consumption. In terms of aluminum, technological breakthroughs in recycled aluminum (such as hydrogen-based direct reduction) may change the supply-demand pattern and reduce dependence on primary ores.
Long-term (after 2030): Resource nationalism and green barriers
Resource-exporting countries may restrict the export of raw ores by increasing tax rates, mandating local processing, and other means, forcing a restructuring of the global industrial chain. At the same time, ESG standards will reshape the competitive landscape of the mining industry, with low-carbon mines (such as those using renewable energy and comprehensive utilization of tailings) gaining a premium.
Conclusion: In the era of copper and aluminum, those who possess resources will dominate
Amidst the dual narratives of “carbon neutrality” and “geopolitics”, copper and aluminum have transcended the realm of traditional industrial metals, emerging as strategic chips in the great power game. For investors, it is imperative to be vigilant against the volatility risks associated with high prices. However, they should also pay closer attention to the long-term value revaluation opportunities presented by industry consolidation—spanning from mining to smelting, and from trade to finance. A global competition centered around “metal pricing power” has just begun.
Post time: Jan-16-2026