Copper's Record Surge and Its Implications for European and Chinese Mining Stocks

The global copper market is experiencing a historic surge, driven by a confluence of supply-side disruptions, policy tailwinds, and surging demand from the energy transition and artificial intelligence (AI) infrastructure. Copper prices have reached record highs in 2025, with J.P. Morgan forecasting an average of $12,075/mt for the year and a potential peak of $12,500/mt in Q2 2026. This price momentum is underpinned by a tightening supply deficit, geopolitical tensions, and structural demand growth, creating a compelling backdrop for mining stocks in Europe and China.

Global Supply Deficit and Price Projections

The current supply deficit is a direct result of operational setbacks at key mines. The Grasberg mine in Indonesia, the world's second-largest copper producer, remains in force majeure until 2026 following a deadly mudslide. Similarly, the Kamoa-Kakula mine in the Democratic Republic of Congo and Chile's El Teniente mine faced production delays in 2025. These disruptions, combined with slower-than-expected output growth, have led to a projected global refined copper deficit of 330 kmt in 2026 according to J.P. Morgan. Long-term forecasts are even more dire: BloombergNEF warns of a potential 19 million metric ton shortfall by 2050 without significant new mining and recycling capacity.

Demand is being driven by two megatrends: the energy transition and AI infrastructure expansion. Copper is essential for renewable energy systems, electric vehicles, and data centers, with BloombergNEF estimating that demand could grow by 400% by 2050. Meanwhile, U.S. stockpiling of copper amid tariff uncertainties under President Donald Trump's proposed policies has further tightened global supply.

European Mining Stocks: Strategic Projects and Policy Alignment

European copper miners are capitalizing on the supply deficit through aggressive production expansion and strategic alignment with policy trends. Glencore, for instance, plans to increase copper output to 1 million tonnes by 2028 and 1.6 million tonnes by 2035, including the restart of its Alumbrera mine in Argentina. The company's focus on low-cost, high-grade assets positions it to benefit from sustained price strength.

Lundin Mining reported robust third-quarter 2025 results, with revenue of $1.007 billion and cash costs of $1.61 per pound, reflecting its ability to navigate rising input costs. The firm has raised its full-year production guidance to 319,000–337,000 tonnes of copper, underscoring its confidence in the market.

European firms are also aligning with green industrial policies. The EU's ReSourceEU strategy, a €3bn initiative to reduce reliance on China for critical minerals, has spurred investment in sustainable mining technologies. This aligns with the region's broader push for decarbonization, which is expected to drive demand for copper in grid upgrades and renewable energy projects.

Chinese Mining Stocks: Dominance and Global Expansion

China remains the linchpin of the global copper supply chain, accounting for 48% of smelting capacity despite producing only 8% of mine output. Leading companies like Jiangxi Copper, Tongling Nonferrous, and Zijin Mining are leveraging their low-cost refining capabilities to dominate global markets. Zijin's involvement in the Kamoa-Kakula mine in the DRC, for example, is projected to yield 600,000 metric tons of copper annually.

Chinese firms are also expanding internationally to secure raw materials. CMOC Group's Tenke Fungurume and Kisanfu mines in the DRC are already producing 600,000 metric tons per year. This global footprint, combined with aggressive investments in green technologies, ensures China's continued leadership in the copper supply chain.

However, the ICSG's projection of a 289,000 metric ton surplus in 2025 highlights the complexity of the market. Rising inventories in China and global trade uncertainties have created short-term volatility. Yet, structural demand from AI infrastructure and electrification is expected to outpace supply growth, reinforcing long-term bullish fundamentals.

Policy Tailwinds and Market Dynamics

Policy interventions are reshaping the copper landscape. The EU's ReSourceEU strategy aims to diversify supply chains and reduce dependency on China, while China's power-grid upgrades and AI infrastructure investments are driving domestic demand according to The Guardian. Meanwhile, U.S. stockpiling has created a premium for COMEX copper over LME prices, further tightening global supply.

For investors, the key is to identify companies with strong operational execution, low-cost production, and alignment with these policy trends. European firms like Glencore and Rio Tinto, highlighted by Citigroup and Oddo BHF as top picks for 2026, offer exposure to both near-term price momentum and long-term structural demand. In China, Zijin Mining and CMOC Group's international projects provide a hedge against domestic regulatory risks while capitalizing on global demand.

Conclusion

The copper market is at a pivotal inflection point, driven by a structural deficit, geopolitical realignments, and transformative demand from the energy transition and AI. For investors, European and Chinese mining stocks represent compelling opportunities, particularly those with robust production pipelines, strategic geographic diversification, and alignment with policy tailwinds. As J.P. Morgan notes, copper prices are likely to remain elevated through 2026, making now a critical time to position for the next phase of the copper supercycle.