The price of copper has marched 12% higher over the past six months, bringing ASX copper shares along for the ride.

Today, the electrifying metal is perched at its highest point in 14 months, commanding a US$4.19 per pound price. Despite the recent performance, some analysts believe the rally is set to continue. If true, further upside in ASX copper stock might be only a matter of time.

Commodity prices are a function of supply and demand. Because of this, we can study the market for any expected changes in either of those two to give a glimpse into where prices might head in the future.

More supply and less demand can lead to much lower prices. Less supply and less demand can result in unchanged prices. But, less supply and more demand… that can be a recipe for a dramatic price increase, depending on the severity.

As it turns out, developments that could aid in reduced supply and greater demand for copper have unfolded over the past week.

Firstly, China moved closer toward potentially cutting copper production by 10% last week. These talks have come about as Chinese copper smelters struggle to refine the base metal economically. For example, a cargo of copper ore from ASX share BHP Group Ltd (ASX: BHP) reportedly offered $3 per tonne for treatment and 0.3 cents per pound for refining — a decade low, according to industry sources.

Secondly, loan changes could boost the demand side of the equation. As reported by Reuters, China's central bank overnight announced the removal of minimum down payments on vehicle financing stipulated by the government.

Changes are being made to revitalise consumer spending in the largest vehicle market in the world.

China accounted for 69% of all new electric vehicle sales globally in December 2023. Hence, loosening loan conditions could mean increased demand for copper-heavy EVs.

An analyst at Wilsons, an Australian wealth firm, is also bullish on the year ahead for copper, saying:

Leaving aside copper's strong long-term demand outlook, from a perspective the global macro environment is also supportive of copper demand over the next 12 months.

BHP and Sandfire Resources Ltd (ASX: SFR) are the firm's top picks in the sector.

Aussie copper miners are basking in a mostly green day after copper prices surged overnight. Some are even setting fresh 52-week highs in today's session, including:

The BHP share price is down 0.4% despite the rally in copper prices. Shares in the ASX mining giant have underperformed the S&P/ASX 200 Index (ASX: XJO) over the past 12 months, falling 2.8% versus the benchmark's 8% gain.