The price of copper, a metal crucial for modern industry and the green energy transition, has shattered records by touching the $13,000 per ton mark for the first time ever. This surge extends a blistering rally that began last year, fueled by deepening concerns over global supply shortages and trade disruptions.
Supply Disruptions and Soaring Demand
A series of unexpected events at major mines worldwide is tightening the market. A recent strike at Chile's Mantoverde mine is just the latest in a string of outages. Earlier, a deadly accident at the world's second-largest copper mine in Indonesia and an underground flood at a key operation in the Democratic Republic of Congo severely hampered production. These disruptions are hitting at a time when global demand for copper is expanding rapidly, driven by its use in everything from electric vehicle batteries and data centres to traditional infrastructure.
The US Tariff Factor and Market Dislocation
Adding another layer of complexity is the threat of trade policy. US President Donald Trump's plan to revisit tariffs on primary copper in 2026 has revived an arbitrage trade, prompting traders to rush shipments to American shores in recent weeks. This activity is draining supplies from other regions. According to analysts at UBS, while the US holds about half of global copper inventories, it consumes less than 10% of global demand. This mismatch creates a significant risk of shortages elsewhere in the world.
Analysts Forecast Continued Deficit
Financial experts are sounding the alarm on a sustained supply crunch. Analysts from China Securities Co., led by Wang Jiechao, noted that "Overall supply shortfalls, coupled with regional dislocation caused by US tariffs, are propelling copper." They have forecast a significant imbalance, predicting that the global copper market will face a shortage of more than 100,000 tons in 2026. This fundamental tightness is the primary engine behind the price rally.
On the London Metal Exchange, the bellwether three-month copper contract jumped 4% to $12,963.50 a ton on Monday afternoon local time, after briefly breaching the $13,000 level. This follows an extraordinary 42% price surge in 2025
