Copper Surges to Fresh Record as Inventories 'Locked in the US'

Copper Market Analysis: Prices, Supply, and Market Response

Copper prices reached an all-time high of $5.9245 per pound on Monday, surpassing previous peaks driven by U.S. tariff policies and global supply disruptions. The surge was fueled by reduced LME copper stockpiles and continued demand for the metal in AI, power grids, and electric vehicles.

The current price rally began in September after a major mine shutdown in Indonesia, which further tightened global supply according to market analysis.

U.S. copper prices have been elevated by ongoing tariff uncertainty, despite copper receiving an exemption from recent import levies. Traders had previously moved large volumes of copper into the U.S. to hedge against potential tariffs, creating an imbalance between U.S. and London-based prices. This has led to record premiums for U.S. buyers and global arbitrage opportunities.

Supply constraints remain a major factor, with mine development cycles taking years to bring new projects online. Disruptions at major copper producers like Freeport-McMoRan's Grasberg mine in Indonesia continue to limit output, pushing prices higher. Analysts at Goldman Sachs expect copper prices to climb further, projecting $15,000 per metric ton in London by 2030 based on current forecasts.

Why Did This Happen?

Copper prices have been supported by a global supply deficit and rising demand from infrastructure and renewable energy sectors. A 55% drop in LME copper stocks since late August has exacerbated price volatility, with much of the supply redirected to the U.S. due to trade distortions from tariff policies.

The U.S. now sources copper from a broader range of countries, including Congo, Australia, and Japan, compared to 2024 when 87% of U.S. copper imports came from Chile and Canada. This shift reflects a broader trend of diversifying supply chains in response to geopolitical and trade policy uncertainty.

How Did Markets Respond?

The price surge has boosted copper miners and producers, with firms like Canadian Copper Inc. (CCI) advancing plans for new projects in New Brunswick. The company recently completed a Preliminary Economic Assessment (PEA) for its Murray Brook and Caribou projects, projecting an average annual production of 30 million copper equivalent pounds.

Canadian Copper has also made progress on environmental permitting and metallurgical testing, supporting its goal of producing copper concentrates in under 36 months. The company is funded for further engineering, testwork, and acquisition of the Caribou Processing Complex according to company reports.

Global copper premiums have also reached record levels, particularly for Chinese buyers who now pay $335-$350 per tonne for copper cathodes. These higher premiums are a response to U.S.-centered trade arbitrage and limited global supply.

What Are Analysts Watching Next?

Analysts are keeping a close eye on potential changes in U.S. tariff policies and the likelihood of a 15% tariff hike in June 2026. A reinstated tariff could further distort global copper pricing and push COMEX/LME spreads wider.

Another key factor is the pace of new copper mine development. Industry experts warn that lengthy timelines and high capital costs may push the global supply deficit to 30% by 2035, which could drive prices even higher according to industry projections.

Investors are also watching for policy support in the U.S. and other major economies, which could accelerate infrastructure spending and boost demand for copper in construction, power grids, and electric vehicles. Goldman Sachs analysts suggest that strategic stockpiling by countries like the U.S. and China could provide a floor for prices even in a weaker global growth environment.