Copper: The hidden Oil of the green transition

Copper has quietly become what oil once was: the metal that defines power, growth, and global balance.

For years it was treated as an industrial staple, useful but unglamorous. Now it’s the backbone of the green transition, the conductor of every electric dream. From solar panels and EV batteries to AI-powered data centers, the world’s decarbonization story runs on copper wire.

Yet this new demand is exposing an old truth: no transition comes free. Prices have recovered above $4,50 per pound (around $10,000 per tonne) on COMEX, rebounding from last year’s lows as investors refocus on structural shortages. Inventories remain near record lows, and supply growth is failing to match the pace of green spending. The result is a new tension between ambition and reality, one that could make copper the quiet driver of the next inflation cycle.

The “green decade” may not be powered by oil, but its fate still depends on a single resource mined from the earth.

The new strategic metal

Every major technology shaping the low-carbon economy runs through copper. Each electric vehicle uses roughly four times more copper than a conventional car. Every megawatt of solar or wind capacity requires kilometers of copper cabling. Even the AI boom, with its sprawling data centers and cooling systems, is intensifying demand for efficient conductors.

This “electrification multiplier” has turned copper from a cyclical industrial metal into a structural asset. It now bridges the old and new economies: still tied to construction and manufacturing, yet indispensable to clean energy, automation, and digital infrastructure. That duality makes copper uniquely exposed to both fiscal stimulus and policy shocks.

The irony is that while policymakers speak of diversification, production is more concentrated than ever. Five countries account for over 60 percent of global mine supply, with Chile and Peru alone dominating the refined market. Add in smelting dependence on China, and copper becomes not just a commodity but a strategic choke point — the wiring behind the world’s most ambitious transition.

A geography of dependence

Copper’s importance is magnified by where it comes from, and by how fragile those supply lines have become. The world’s green transition now depends on a handful of mining regions and refining hubs, each exposed to its own political and environmental stress.

In Chile and Peru, chronic droughts and community protests have slowed output from some of the planet’s largest mines. In the Democratic Republic of Congo, political instability and weak infrastructure threaten the supply of both copper and cobalt, metals that often come from the same ore. Meanwhile, China’s dominance in refining and smelting gives Beijing enormous leverage over the final stages of production. More than 40 percent of global copper is refined there, and export controls can ripple instantly across markets.

This concentration of power mirrors the old oil era: a few producers shaping the price and pace of global growth. But unlike oil, the copper trade lacks coordinated governance, no OPEC, no stabilizing mechanism.

It’s a decentralized system bound together by logistics, contracts, and the unspoken assumption that supply will always meet demand. That assumption is now cracking.

Copper as the new Oil

Half a century ago, oil was the world’s master variable, the price that dictated everything from wars to interest rates. Today, copper is quietly taking on a similar role. As economies pivot from hydrocarbons to electrification, the wiring metal has become the new thermostat of inflation.

Each supply squeeze now reverberates through construction, renewables, and manufacturing, lifting input costs across entire economies. When OPEC cuts production, the world fears an oil shock. When copper inventories fall or China tightens exports, investors brace for what some analysts call a “green inflation” shock, slower growth, higher prices, and policy paralysis.

Governments are starting to respond in ways that echo the 1970s. The U.S. and the EU have both moved to classify copper as a “critical material,” funding domestic mining and recycling projects under the Inflation Reduction Act and the Critical Raw Materials Act. Yet it takes more than a decade to bring a new mine online. The imbalance between political urgency and physical supply makes copper a perfect storm of scarcity and ambition, a market that sets the pace of the green revolution while testing the limits of global cooperation.

Market dynamics and price outlook

Copper’s price action over the past year captures the global economy’s mood swings better than any macro index. After sliding below $4,00 per pound amid China’s sluggish recovery, copper has rebounded toward $5.10, testing the upper end of its 2024 range. On weekly Renko charts, the long-term structure remains bullish as long as the $4,50–$4,60 zone holds, a key support cluster tied to late-2023 ranges.

Copper Renko chart – structural bullish recovery above the $5.00 zone (Chart: LM Trading & Development via TradingView)

Fundamentally, the metal is torn between two narratives. The cyclical one reflects softer manufacturing data and slower credit growth in China. The structural one, however, points to an unavoidable shortage driven by electrification and underinvestment in new mines. Traders are increasingly treating copper as a proxy for “global resilience”: when the metal holds firm despite weaker PMIs, risk appetite across equities and EM FX tends to stabilize.

Speculative positioning has turned modestly net-long, while physical inventories at LME and Shanghai remain historically low. The next catalyst could come from Chinese export policy or any disruption in South American output. In short, copper is no longer just a barometer, it’s becoming a steering wheel for global inflation expectations.

Trader’s note and conclusion

Copper is not just another industrial metal anymore, it’s the new pulse of global liquidity and ambition.

Every rally tells us something about confidence in the green transition; every pullback exposes how fragile that confidence still is. For traders, this means the next commodity super-cycle may be built not on oil or gold, but on a resource that powers both wires and promises.

With price holding above $4,50 per pound and the long-term trend intact, the metal remains the quiet compass of the energy transition. The market’s message is simple: if the world truly wants decarbonisation, it must pay for it, in copper.

And in that price, we’ll find the balance between growth, inflation, and the cost of progress.