Short answer: not on the data we have. The world refined copper market was in surplus in the first seven months of 2026. What is tight is China, and that is a different problem with different consequences.
Every few months the “structural copper deficit” story goes around again: electrification, data centres and grids will need more copper than mines can supply, so prices must go up for a decade. The argument is tidy. The numbers do not support it. We have followed the copper market for more than fifty years, and the latest International Copper Study Group (ICSG) data says something more interesting than the consensus.
What the ICSG data shows for January–July 2026
- World refined copper market: a surplus of 32kt in the first seven months of 2026, down from a 157kt surplus in the same period of 2025.
- Excluding China, and allowing for China’s net imports of cathode, the rest of the world ran a surplus of around 200kt. Exchange stock movements across the three global exchanges confirm this.
- Mine production fell 1%, from 13,476kt to 13,321kt.
- Refined production rose 1.7% to 16,762kt, with secondary (scrap-based) production up 4.3% to 3,035kt. China’s refined output rose 4.6% to 8,119kt; the rest of the world’s fell 1.1% to 8,643kt.
- Refined consumption rose 2.5% globally — but only 0.8% outside China. Asia is the driver, the United States is improving, and the European Union remains the weak link.
A market in surplus with consumption growing under 1% outside China is not a structural deficit. It is a market being held up by one buyer.
Why copper prices are at record highs anyway
Copper is trading above $14,500 a tonne, and the reason is China, not the world. Shanghai Futures Exchange stocks fell from 2,146kt in January 2026 to just 56kt by mid-September. China’s monthly imports of refined copper have been rising. The Chinese market is tight, and because China is the marginal buyer, that tightness sets the price for everyone — even while the rest of the world sits on a surplus.
That matters for how long the price can hold. A deficit built on global demand would be durable. A price built on Chinese restocking lasts as long as the restocking does.
The macro risk the deficit story ignores
The deficit case assumes steady global growth. We do not. The wars between America and Iran, and between NATO and Russia over Ukraine, are pushing up the prices of diesel, jet fuel, fertilisers and helium, and in some cases creating outright shortages. Those costs land on households and businesses first and on financial markets second. Our view is that they will cause recession in America and many other countries in 2027. The question for copper is then whether consumption falls faster than production, or the other way round. Nobody arguing for a structural deficit is asking it.
The supply the deficit models leave out: substitution
Industry forecasts of a decade-long deficit also assume copper will keep being used where it is used today. It will not. Three substitutions are already under way:
- Photonics in data centres is replacing copper wiring, the fastest-growing “new demand” source in most deficit models.
- Solid-state transformers are replacing conventional copper-wound units.
- Aluminium in low-voltage underground cable. China has installed at least 14 million tonnes of copper in LV underground power cable since 1980 and is beginning to switch to aluminium, a domestic resource. The EU installed around 6.5 million tonnes of copper in its LV underground grids between 1970 and 2026. As that cable is replaced, the copper comes back as scrap — roughly half of the EU’s 2.975 million tonnes of 2025 consumption was already met from recycled metal.
Put differently: today’s installed copper is tomorrow’s copper mine. Deficit models count the demand from new technology and ignore the supply released when old technology is retired.
What this means for investors and industrial buyers
For investors, copper at these prices is a bet on China continuing to restock into a global surplus and a looming recession. That can keep working for a while; it is not a structural floor. For industrial buyers, the risk is the opposite of what the deficit story suggests: locking in long-term supply at record prices just before demand outside China weakens. The sensible position is to watch three things — Chinese import volumes, exchange stocks outside China, and diesel prices — rather than the deficit headlines.
Frequently asked questions
Is the copper market in deficit in 2026?
No. ICSG data for January–July 2026 shows a world refined surplus of 32kt, and a surplus of around 200kt outside China. China’s own market is tight, which is why prices are high.
Why is the copper price so high if there is a surplus?
China is the marginal buyer. Shanghai exchange stocks have fallen from 2,146kt to 56kt this year and Chinese imports are rising. The Chinese price sets the world price, even when the rest of the world has metal to spare.
Will electrification and data centres create a copper shortage?
They add demand, but substitution is removing it at the same time: photonics in data centres, solid-state transformers and aluminium cable. Models that count the new demand and not the lost demand overstate the deficit.
Simon Hunt has analysed the copper industry for more than fifty years, including more than thirty years working in China. His weekly analysis of copper, commodities and the geopolitics driving them is published in the Simon Hunt Strategic Brief.
Get the full analysis every week
This article is a summary. Subscribers to the Simon Hunt Strategic Brief get the complete copper data each month, the China and Middle East reports as events unfold, and the scenario work on what each outcome means for oil, rates and metals.
