Copper prices have soared this year, hitting multiple record highs as supply disruptions and concerns about U.S. tariffs spurred a surge in demand. This increase is expected to continue until 2026. Analysts at Citi expect prices for the red metal to soar on the back of rising demand led by the energy transition and artificial intelligence sectors. Electrification, power grid expansion, and data center construction require large amounts of metal for wiring, power transmission, and cooling infrastructure. Expected copper shortages due to mine supply constraints and continued copper “hoarding” in the US due to arbitrage opportunities are expected to contribute to the price hike, according to Citi, which said: “We expect the US to hoard global copper inventories and, in a bullish case, further draw down depleted non-US inventories.” The brokerage expects copper prices to reach $13,000 per tonne in early 2026 and $15,000 by the second quarter of next year. Similarly, Avatar Commodities CEO Andrew Glass sees copper prices reaching “stratospheric new highs,” especially as physical hoarding in the US continues to erode international availability. He said the current rally reflects “highly irregular distortions” driven primarily by tariff expectations rather than traditional supply and demand fundamentals, adding that Chinese copper demand has disappointed in recent months. Ewa Mansey, commodity strategist at ING, said she expects copper prices to rise to $12,000 per tonne in the second quarter of next year, and higher copper prices will pressure margins in energy-intensive sectors. Spot prices for the red metal, considered a leading indicator of the global economy, rose further to $11,816 per tonne on Friday on the London Metal Exchange, with three-month futures ending at $11,515. The significant tightening is linked to concerns about U.S. tariffs on refined copper flowing into the U.S. StoneX Natalie Scott-Gray Spot prices for LME copper, considered the global benchmark, are up about 36% so far this year and 9% in the last month. Experts told CNBC that the recent price rally has been fueled by tariff concerns, with concerns that the U.S. government could impose tariffs on refined copper imports starting in 2027, leading to a surge in demand. “The significant tightening is related to U.S. tariff concerns on refined copper flowing into the U.S.,” said Natalie Scott Gray, senior metals analyst at Stone With copper prices in the U.S. higher than in other regions, traders have a strong incentive to ship large quantities of copper into the country, Scott-Gray said. Tight Supply Copper prices on the London Metal Exchange were trading at around $11,515 per tonne for three-month delivery, while copper futures for March delivery on the US COMEX were trading at around $11,814 per tonne, creating an arbitrage opportunity. As a result of this, supplies outside the United States are becoming tighter, and copper inventories on the London Metal Exchange are particularly tight. The London Metal Exchange is often described as a market of last resort, absorbing excess copper when demand is weak and releasing it when supply is tight elsewhere. LME inventory data is commonly interpreted as a barometer of broad market tightness. An increasing share of the LME’s copper inventory is reportedly tied up in so-called cancellation warrants. This means the metal is being reserved for physical delivery by other buyers and is effectively unavailable on the market, raising fears of a supply squeeze. According to data released by the LME last week, the exchange’s copper inventory stands at around 165,000 tonnes, of which 66,650 tonnes, or about 40%, is scheduled for delivery. Inventory levels are down nearly 40% compared to the beginning of the year. Copper’s rally is also supported by continued mine disruptions, which hurt hopes for future supply increases. In a note published Wednesday, Deutsche Bank characterized 2025 as a “highly disrupted year”, with production slowdowns forcing several major mining companies to revise production forecasts downward. Over the past week, several major copper producers have provided updated production guidance, cutting copper production by around 300,000 tonnes in 2026, according to data compiled by Deutsche Bank. “Overall, the market is clearly in the red, and we see mine supply to be at its weakest in Q4 2025 and Q1 2026,” the bank said, predicting peak prices and market tightness in the first half of 2026. Commodity trading giant Glencore has lowered its production forecast for 2026 to a range of 810,000 to 870,000 tonnes due to lower procurement from Colahuasi, a major Chilean mine it jointly owns. with Anglo-American. Mining group Rio Tinto also expects copper production to fall between 800,000 and 870,000 tonnes next year, compared with this year’s forecast of 860,000 to 875,000 tonnes, according to Reuters.
