Copper prices have surged dramatically this year, reaching multiple record highs due to supply disruptions and heightened demand fueled by fears over U.S. tariffs. Analysts at Citi are forecasting that this upward trend will persist, projecting copper prices could soar to $13,000 per ton by early 2026, and possibly even spike to $15,000 in the second quarter of next year. These predictions are supported by increasing demand from sectors like energy transition and artificial intelligence, both of which require significant copper for wiring, power transmission, and cooling infrastructure.
Citi’s report emphasizes the projected copper deficits stemming from restricted mine supply and what they describe as ongoing “hoarding” of copper in the U.S., where traders are capitalizing on price disparities. “We expect the U.S. to hoard global copper inventory, and in a bull case, draw further on depleted ex-U.S. stock,” the report stated. Meanwhile, Andrew Glass, CEO of Avatar Commodities, predicts “stratospheric new highs” for copper prices as physical hoarding diminishes global availability. He noted that the current price rally represents a “highly irregular distortion,” driven more by tariff speculation than conventional supply-demand dynamics.
Further insights from ING’s Ewa Manthey indicate that while prices may climb to $12,000 per ton by next year’s second quarter, this surge could squeeze profit margins in energy-intensive industries. Spot prices on the London Metals Exchange recently reached $11,816 per ton, with three-month futures closing at $11,515. Experts attribute a significant portion of this price tightness to fears surrounding U.S. tariffs on refined copper imports, anticipated to take effect in 2027. Natalie Scott-Gray, a senior metals analyst at StoneX, remarked, “A huge amount of tightness has to do with U.S. tariff concerns with refined copper inflows into the U.S.,” underscoring the impact of supply from outside the country.
Data shows that refined copper inflows into the U.S. have increased by approximately 650,000 tons this year, boosting national inventories to around 750,000 tons. The discrepancy in copper prices between the U.S. and global markets provides strong incentives for traders to move copper into the country, further tightening international supplies. The latest figures reveal that London Metal Exchange (LME) copper futures last traded at about $11,515 per metric ton for three-month delivery, while U.S. COMEX futures were trading at roughly $11,814, signaling significant arbitrage opportunities.
Market analysts are also observing a growing amount of copper tied up in canceled warrants on the LME. This means that a considerable volume of the metal is reserved for physical delivery, further exacerbating fears of a supply squeeze. Current LME inventory levels are around 165,000 tons, with 40% earmarked for delivery, marking a nearly 40% decline in availability since the beginning of the year.
Ongoing disruptions at key copper mines further complicate supply forecasts. Deutsche Bank has labeled 2025 as “a heavily disrupted year,” predicting a significant decline in output from major producers, with estimates lowering by about 300,000 tons for 2026. Commodities trading giant Glencore has adjusted its production forecast to between 810,000 and 870,000 tons, while Rio Tinto anticipates a drop to similar levels. Both companies cite operational challenges at major mines, particularly in Chile, as contributing factors. As the market braces for tighter supplies, experts expect prices to peak during the first half of 2026, positioning the copper market at a critical juncture in the global economy.
Original Source: https://www.cnbc.com/2025/12/15/copper-prices-could-hit-new-highs-as-traders-rush-metal-into-the-us.html
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Publish Date: 2025-12-15 11:15:00
