CSC: Copper Supply-Demand Gap Continues to Widen, LME Copper Price Center Expected to Rise Year by Year
Taylor Wilson
China Securities Construction (CSC) projects the global copper deficit will widen from 100,000 tonnes in 2026 to 480,000 tonnes by 2028; paired with Fed rate cuts and a weaker dollar, LME copper's price floor could climb from ~$10,000 to $14,000/tonne — mines can't keep up, but power demand keeps accelerating.
How big is the deficit?
CSC estimates global copper deficits of 100k, 290k, and 480k tonnes for 2026–2028 — widening every year.
This means → supply barely covers part of demand growth each year, and the gap compounds, steadily draining inventories.
Corresponding price targets: LME copper's floor rises from $9,968/t in 2025 to $12,500 in 2026, $13,000 in 2027, and $14,000/t in 2028.
In plain terms = the shortage gets worse every year, so the price floor has to move up with it.
Why can't mines produce more?
Global copper exploration budgets sit at ~$3.3 billion — just 70% of the 2012 peak. Only 20 new deposits were discovered in 2014–2024, accounting for 7.8% of all finds since 1990.
A new mine takes over 15 years from discovery to first output. This means → even a discovery today won't yield copper until around 2040 — no short-term relief is possible.
Three major mines cut 2026 guidance: Grasberg (Indonesia — smelter shutdown + mudslide), Mirador (Ecuador — political transition froze contract reviews), Kamoa-Kakula (slowed development after seismic events and flooding).
Even as capacity gradually recovers in 2027–2028, annual supply gains are capped at ~600k tonnes — and demand growth is already chasing that number.
How much pressure is the smelting stage under?
In 2025 smelters burned through copper-concentrate inventories to maintain output; spot TC — the treatment charge paid by miners to smelters — fell to historic negative levels.
In plain terms = a negative TC means smelters are paying to buy concentrate just to keep running — a sign of extreme ore tightness.
CSC forecasts global refined-copper output of 27.93 Mt, 28.56 Mt, and 29.21 Mt for 2026–2028, with year-on-year growth of only 1.5%–2.3%.
This reflects a hard ceiling: refined output is entirely hostage to upstream ore supply — smelter capacity alone cannot fill the gap.
Who is consuming all this copper?
Grid investment is the single largest driver. Global grid capex has compounded at 13% over the past three years; China and U.S. grid spending is expected to grow above 10% annually for the next five years, pulled by AI-driven power-infrastructure needs.
EVs use ~83 kg of copper per vehicle — 3.6× the 23 kg in a conventional car. In 2026, EVs plus charging infrastructure will consume ~2.11 Mt, or 7.5% of global copper use, adding 300k–330k tonnes per year.
Solar copper demand dips -120k tonnes in 2026 as aluminum substitution deepens, but returns to positive growth in 2027–2028.
CSC projects global copper-demand growth of 2.4%, 2.9%, 2.9% for 2026–2028 — consistently above supply growth every year.
Why did copper spike, then stall?
In December 2025 copper surged 22% in a single month — matching the entire prior year's gain.
The trigger: Codelco's 2026 refined-copper long-term contract premium of $330–350/t was accepted, prompting physical copper to move toward COMEX and squeezing non-U.S. markets.
In plain terms = large volumes of copper were shipped to the U.S. for delivery, creating a sudden "shortage" elsewhere and forcing prices up.
Once the COMEX–LME spread collapsed, the arbitrage logic broke down and copper settled into a range around $13,000/t. As of April 30, 2026, LME three-month copper closed at $13,019/t, up 4.2% year-to-date.
Can $14,000 actually happen — and what's the key test?
Supply side: long mine-development cycles and geopolitical policy risk put a clear ceiling on incremental output.
Demand side: AI-driven grid buildout and rising EV penetration deliver structural demand that is still accelerating.
This means → whether the supply-demand "scissor gap" keeps widening through 2028 is the core test for the $14,000/t target.
A Fed rate-cutting cycle and a weaker dollar add financial tailwinds that further support a rising copper-price floor.
Content is for reference only, not financial advice.