Copper prices achieved a historic milestone on Tuesday, shattering the $13,000-per-ton barrier for the first time ever. This surge underscores a powerful bullish trend fueled by expectations of a significantly tighter supply environment in the global market.
Record Rally in Global and Domestic Markets
On the London Metal Exchange (LME), the three-month copper futures contract soared by as much as 2.2% to an unprecedented $13,283 per ton. This rally eclipsed the previous day's peak, continuing a remarkable upward trajectory. The momentum was mirrored in India, where copper prices on the Multi Commodity Exchange (MCX) climbed by 1.25% to reach ₹1,330.30.
The rally is part of a broader strength in base metals as 2026 begins. The LMEX Index, which tracks six major metals including copper, has climbed to its highest point since March 2022. Since late November, copper has surged more than 20%, while aluminium has hit its highest price in over three years.
Key Drivers: Tariff Fears and Supply Disruptions
A primary catalyst behind the price spike is renewed anxiety over potential US trade policies. Fears that the Trump administration may impose tariffs on refined copper have triggered a rush to ship the metal into the United States. This activity, aimed at beating any future duties, is raising the risk of supply shortages in other regions.
US copper imports in December rose to their highest level since July, according to a Bloomberg report, reflecting this pre-emptive movement. President Trump has directed the Department of Commerce to submit an update on the US copper market by the end of June, after which a decision on refined copper tariffs is expected. The department had earlier suggested a potential duty structure of 15% starting in 2027, escalating to 30% in 2028.
Beyond trade dynamics, the physical supply chain remains under strain. A series of accidents at some of the world's largest mines has disrupted output and slowed expansion plans over the past year. Simultaneously, smelters are grappling with pressure from miners to accept record-low treatment and refining charges, as securing sufficient raw copper concentrate becomes increasingly challenging.
Trading Outlook and Brokerage Recommendation
The recent price action has been highly volatile. Axis Direct noted that MCX Copper last week recorded a high of ₹1,393 and a low of ₹1,201, ending the week marginally lower by 0.7%. The brokerage firm warns of continued instability and elevated volatility in the near term.
"The daily RSI is hovering near 70 but forming lower lows, indicating negative divergence and signalling emerging weakness in price momentum," the firm stated. They identified the all-time high of ₹1,393 as a strong resistance level. On the downside, a breakdown below the ₹1,200 mark could intensify selling pressure, potentially dragging prices towards ₹1,150 and ₹1,130.
Based on this analysis, Axis Direct has recommended investors to consider selling or booking profits if the price falls below ₹1,200, setting a stop-loss above ₹1,230 with price targets of ₹1,150 and ₹1,130.
(With inputs from Bloomberg)
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies. Investors are advised to consult certified experts before making any investment decisions.
