Silver and gold have been reaching all-time highs, and copper is following suit, breaking records as well. This growth in metal markets is shaping the trading landscape of 2026.
Copper futures have jumped by as much as 10%, hitting prices over $13,000 per tonne. Factors like supply chain disruptions, evolving trade policies, and surging demand are driving prices up. Currently, copper is trading at about $6.30 per pound, which is quite a leap from nearly $4.25 just a year ago.
Copper plays a crucial role in supporting technologies like AI and global electrification initiatives that include electric vehicles and power grid advancements.
Global copper demand is projected to rise sharply from 28 million tons in 2025 to 42 million tons by 2040. However, without significant increases in supply, the market is expected to face a 10 million ton shortfall, according to S&P Global. Analysts point out that current high copper prices may not accurately reflect market conditions.
Some experts suggest that speculative trading has contributed to these price swings, making them less reliable. “Speculative positioning seems to be overstated and disconnected from actual market conditions,” mentioned a senior metals demand analyst at StoneX, indicating that copper’s current levels might not be sustainable.
Back in late June, copper was below $10,000 per tonne on the London Metal Exchange. But on July 8, President Trump announced a significant tariff on copper imports to bolster domestic supplies. This decision led traders to reroute copper through U.S. routes to bypass tariffs, while buyers in Europe and Asia tapped into LME warehouses, hinting at tightening outside U.S. markets.
Later announcements clarified that the proposed tariffs would only apply to semi-finished copper products, causing a temporary cooling in prices.
The copper market has faced real disruptions, including an earthquake and flooding at the Kakula Mine and a mudslide at Freeport-McMoRan’s Grasberg mine, one of the largest copper suppliers globally, forcing the company to declare force majeure on deliveries.
As a result, analysts have adjusted their forecasts for overall copper production in 2025, even as demand continues to rise due to the push for electrification and AI technologies. For instance, electric vehicles require nearly three times the amount of copper compared to traditional gasoline cars, and renewable energy projects demand significant copper resources too.
“The convergence of escalating demand, limited supply, and concentrated processing capacity poses systemic risks that need to be addressed by policymakers and industry stakeholders,” noted S&P researchers.
Ironically, the demand from data centers is expected to reach 475,000 tons in 2026, a significant increase from 110,000 tons in 2025. This suggests that developers are less concerned about copper prices when expanding data centers.
However, supply isn’t keeping pace. According to the International Copper Research Group, the copper market is anticipated to transition from surplus to deficit for the second consecutive year, despite modest projected growth in demand.
Yet, the current copper prices might not truly indicate market dynamics. With the unpredictability of trade policies, there’s a chance that no tariffs will be imposed on refined copper coming from the U.S.
Interestingly, the muted response of the steel market to potential tariffs suggests that there could be misplaced speculation affecting copper pricing. The quick adjustment of U.S. and global steel markets to last year’s import tariffs underscores this disparity.
At the same time, new mining projects and expansions in countries like Chile and Brazil are expected to increase global output by 2.3% in 2026.
China, the largest consumer of copper, anticipates a decline in this demand due to a predicted economic slowdown. On the flip side, CMOC Group, the world’s largest copper producer, aims to boost its output significantly in the upcoming year.
Even with this production growth, it’s likely that copper prices will continue to remain elevated. Some analysts, for example, see the potential for a metals supercycle, while others suggest that major copper producers are currently pricing futures lower than spot prices.
The recent volatility in copper prices is highlighted by a notable drop in the spread between LME spot contracts and three-month futures, which indicates a level of uncertainty in the market. Observers suggest that while the copper market may see a widening deficit in 2026, this doesn’t necessarily point to an imbalance at current prices.
