The 2020 pandemic dragged down most commodity prices, and copper — along with zinc, essential raw materials for industrial activity — was no exception. As economies moved toward recovery and clean-energy commitments increased, copper's rebound was attributed largely to one country: China.
While South American mines cut production due to Covid-19 disruption, China achieved a nine-year production high by August 2020. Analysts pointed to China's stimulus-driven recovery, alongside investor activity around the price gap between London and Shanghai exchanges, as key drivers of the price rally.
China is both a leading producer and the largest consumer of copper, using roughly half of world reserves in manufacturing. Rising demand for Chinese home appliances and medical products in developed markets, alongside a broader shift to copper-intensive clean-energy infrastructure, supported the long-term price outlook.
Supply-side pressure added to the rally: lower ore grades and deeper deposits offset increased mining effort, while Peru — the world's second-largest copper producer — faced local protests that stalled hundreds of millions of dollars in planned exports.
Within the Asia-Pacific region, South Korea, Vietnam, Malaysia, Thailand and Taiwan together account for a significant share of China's copper imports, illustrating how tightly regional trade flows are linked to Chinese demand.
This market commentary is provided by Merchant Trade Guarantee Corporation Company Limited (MTG), a non-bank financial company specialising in trade and structured-finance consultancy since 2000.