Copper prices have surged past a major milestone, topping $12,000 a ton for the first time as mounting supply disruptions and trade concerns tighten the global market for the crucial industrial metal. Benchmark copper on the London Metal Exchange climbed as much as 2% on Tuesday to hit $12,159.50 a ton, Bloomberg reported. Prices are now up more than 35% this year, putting copper on track for its strongest annual performance since 2009.
Mine Disruptions Fuel Supply Fears
Long-standing concerns over copper supply have moved sharply into focus in recent months, driven by a string of serious mining setbacks across key producing regions. Global output has been hit by multiple incidents, including a deadly accident at the world’s second-largest copper mine in Indonesia, flooding at an underground operation in the Democratic Republic of Congo, and a fatal rock blast at a mine in Chile. Together, these events have raised fresh doubts about the industry’s ability to maintain production levels.
Several major mining companies have already lowered their output guidance for the year. Deutsche Bank has warned that production from the world’s largest miners is expected to fall by 3% in 2025, with further declines possible in 2026.
Tariff Risks Drive US Stockpiling
Concerns over potential US import tariffs have also played a key role in pushing prices higher. Buyers have been rushing to secure shipments ahead of any new levies, leading to a buildup of copper inventories in American warehouses and opening up arbitrage opportunities.
“The US is still in stock-building mode, and I would expect that to continue until we get further information from the US government,” said Helen Amos, a commodities analyst at BMO Capital Markets Ltd.
While global copper inventories have risen, much of that stock is effectively locked away in the US, limiting availability elsewhere and intensifying competition among manufacturers in other regions.
Electrification, AI Drive Long-Term Demand
Even as near-term supply tightens, demand for copper remains strong due to powerful structural trends. The global push toward electrification is driving sustained consumption, with copper essential for power grids, renewable energy infrastructure, electric vehicles, and manufacturing.
Investors are also betting that demand will climb further as artificial intelligence expands, requiring massive upgrades to data centers and power systems.
Industry analysts warn that many of the richest and most accessible copper deposits have already been exhausted, raising questions about where new supply will come from in the coming decade.
Market Headed For Major Deficit
Experts increasingly believe the copper market is approaching a significant shortfall. Morgan Stanley forecasts that global demand will exceed supply by roughly 600,000 tons next year, marking the most severe deficit in more than two decades, with imbalances expected to worsen thereafter.
Citigroup has told clients that copper could reach $15,000 a ton in a bullish scenario, particularly if a weaker dollar and US interest-rate cuts attract more investor inflows.
However, not everyone is convinced the rally is fully justified. Goldman Sachs analysts have cautioned that the price surge has been driven largely by investor expectations of future shortages rather than current supply-and-demand fundamentals.
According to BMO, copper stockpiles held in the US are unlikely to return quickly to global markets, keeping supply tight elsewhere.
