Gold, silver: As the sharp rally in gold and silver raises questions around sustainability and valuation comfort, investor attention is gradually shifting toward alternative metals. Copper is emerging as a preferred choice for those looking to participate in the next phase of the commodity cycle, with market participants increasingly describing it as “the next gold”. Unlike precious metals, copper’s appeal lies less in safe-haven demand and more in its deep linkages to industrial growth, making it a macro-driven opportunity rather than a short-term catch-up trade.
Long seen as a quiet industrial workhorse, copper is now emerging as one of the most critical metals for the global economy as demand from technology, energy and defence sectors accelerates while supply struggles to keep pace. Prices have risen nearly 40% in recent months, a move that market participants attribute to structural fundamentals rather than speculative excess.
Copper prices and demand
Copper prices have already posted strong gains over the past year, supported by a combination of trade disruptions, supply constraints and resilient global demand. Domestic spot prices have risen sharply, with analysts pointing to the impact of US-led tariff measures, strategic stockpiling and production setbacks at key global mines. Momentum is expected to remain firm in the near term, aided by steady economic growth in major economies, rising investment in artificial intelligence-related infrastructure and ongoing inventory accumulation.
“This isn’t hype — it’s math, supply and technology colliding,” said CA Nitish Kaushik, noting that copper is becoming indispensable across fast-growing sectors. Demand is being fuelled by the rapid expansion of electric vehicles, renewable energy infrastructure, artificial intelligence-driven data centres and modern defence technologies. “Copper powers EVs, AI, renewables and defence — it’s in everything that’s growing fast today,” he said.
Global mining majors are also recalibrating their strategies. Kaushik pointed out that Barrick, the world’s second-largest gold producer, recently dropped “Gold” from its name, signalling a strategic pivot. “Their focus is now copper — they are betting on it as the future supermetal,” he said.
On the supply side, the outlook remains increasingly constrained. According to Kaushik, there are only about 700 active copper mines globally, while meeting projected 2050 demand would require six new large mines to come online every year. “The problem is that one mine takes nearly 18 years from discovery to production. The math is brutal,” he warned.
By 2035, global copper demand is expected to exceed supply by around 30%, driven by declining output from ageing mines, delayed project approvals and years of underinvestment. For India, which imports billions of dollars’ worth of copper annually, the imbalance could add to pressure on the trade balance.
What sets copper apart
Unlike gold and silver, whose prices are heavily influenced by macro uncertainty and currency movements, copper is primarily driven by industrial consumption. This makes it a complementary asset rather than a substitute for precious metals. Over the medium term, global electrification trends — spanning renewable energy, power grids and electric mobility — are expected to structurally lift copper demand, potentially pushing prices above historical averages.
Supply-side stress continues to reinforce this view. Several large mining projects remain offline or delayed, labour disputes in key producing regions have curtailed output, and declining ore grades have made expansion increasingly difficult. Tightness is also visible in the concentrate market, where smelters are competing aggressively for raw material, underscoring constrained supply conditions.
At the same time, risks remain. Copper prices have benefited from speculative positioning, and any easing of trade tensions or normalisation of supply chains could trigger volatility or short-term corrections.
Copper futures have remained range-bound over the past month. The January contract, currently trading around Rs 1,275 per kg, has largely moved between Rs 1,230 and Rs 1,242. The February contract, now near Rs 1,324, has been fluctuating in a broader band of Rs 1,270 to Rs 1,365. With the January futures set to expire on Friday, January 30, the February contract is more relevant for analysis.
While February copper futures are presently consolidating, the broader trend remains bullish. As long as key support levels at Rs 1,270 and Rs 1,250 are sustained, the market structure is unlikely to turn bearish.