Copper prices have surged to unprecedented levels, not due to a shortage but largely because of the United States’ aggressive acquisition strategy, which has left other nations scrambling for supply.
On the London Metal Exchange, benchmark three-month copper reached a peak of $11,952 per metric ton on Friday, now hovering around $11,655 per ton—marking a 33% increase this year.
In anticipation of potential tariffs, the US has been stockpiling copper, thereby removing substantial quantities from the global market and tightening supplies elsewhere.
According to analysts at Goldman Sachs, “US inventory is effectively ‘trapped’.”
Interestingly, projections for next year suggest a global copper market surplus of 300,000 tons.
This recent price spike punctuates a turbulent year for copper, a critical metal in construction, electrical grids, and electronics.
Earlier this year, traders rushed copper into the US, fearing President Donald Trump’s looming import tariffs.
Unexpectedly, the administration excluded refined copper from these tariffs, leaving importers with excess stock.
The market remains skeptical about the longevity of this tariff exemption.
Goldman Sachs analysts now predict that the White House will introduce a refined copper tariff in early 2026, to be implemented in 2027. This likely delay is expected to spur further US stockpiling, as anticipated tariffs encourage domestic buyers to continue withdrawing copper from the international market.
Meanwhile, the rest of the world is experiencing a supply crunch, with a projected 450,000-ton deficit next year, according to Goldman.
Additionally, the global copper supply has been disrupted by production issues at major mining operations in Indonesia, Congo, and Chile, impacting overall output in recent months.
This scenario has led to increased copper premiums worldwide.
Ewa Manthey, a commodities strategist at ING, noted, “Producers plan to impose record premiums on European and Asian customers next year, effectively compensating for profits they could earn selling to the US.”
AI Demand
The market is also feeling pressure from speculation, as traders invest heavily in copper linked to AI infrastructure and the energy transition, treating it akin to a tech asset.
Investors are focusing on data-center construction, a speculative trend that Goldman analysts caution could lead to a sharp price reversal.
This makes copper prices susceptible to fluctuations in AI-related stocks, especially if the enthusiasm for data center expansion wanes.
Goldman’s analysts remarked, “The copper price rally in December is becoming highly speculative, which makes it vulnerable to a rapid reversal.”
Goldman’s forecast for copper prices in 2026 stands at $11,400 per ton, slightly below the current market levels.
