The global copper market has recently experienced one of its most volatile periods in years. Copper prices on the London Metal Exchange (LME) surged close to $13,000 per ton, marking the metal’s strongest annual performance since 2009. At the same time, prices in New York fell sharply, highlighting the market’s sensitivity to political risks, trade uncertainty, and supply disruptions.
Record-Breaking Copper Prices in London
Copper prices in London jumped by as much as 6.6% during Monday trading — the largest intraday gain since 2022. Although gains later moderated to around 1.6% by mid-afternoon, the rally reinforced copper’s position as one of the best-performing commodities of the year.
Overall, copper prices have risen by more than 35% year-to-date, rebounding strongly after a steep drop in July, when the tightness in the US copper market temporarily eased.
Sharp Decline in New York Copper Futures
In contrast, copper futures on the New York market saw a sharp sell-off. CME copper contracts plunged by as much as 6%, wiping out gains from Friday’s session while the LME was closed.
March-delivery copper on the CME was last trading at around $5.56 per pound ($12,260 per ton), down from an intraday peak of $5.92 per pound earlier on Monday. This divergence between London and New York prices reflects both timing differences between exchanges and contrasting trader sentiment.
Tariff Speculation Fuels Market Uncertainty
One of the key drivers behind copper’s price surge has been speculation that US President Donald Trump could impose tariffs on copper imports. This has triggered a surge in copper shipments into the United States, forcing manufacturers and buyers elsewhere into intense competition for limited supply.
This front-loading of US-bound shipments has helped sustain the rally, even as Chinese demand softens. China accounts for roughly half of global copper consumption, making its demand trends critical to price direction. Traders continue to view copper as a barometer of global industrial health, betting that tariff risks will keep flows to the US elevated.
Supply Disruptions Across Major Mining Regions
Supply has tightened further due to widespread disruptions at copper mines across the Americas, Africa, and Asia, just as governments worldwide increase infrastructure and industrial spending.
A deadly accident at the Grasberg mine in Indonesia, the world’s second-largest copper mine, forced owner Freeport McMoRan to declare force majeure on deliveries and cut its 2026 production guidance. The company stated in November that full production is not expected to resume until 2027.
Elsewhere, an underground flood at Ivanhoe’s Kamoa-Kakula mine in the Democratic Republic of Congo, along with a fatal rock blast at Codelco’s El Teniente mine in Chile, further constrained global output. Prior to the incident, Kamoa-Kakula was on track to become the world’s third-largest copper operation.
Challenges in Developing New Copper Supply
Developing new copper supply remains increasingly difficult due to slow permitting processes, rising capital costs, and environmental constraints. According to industry analysts, nearly every major global investment trend — from the energy transition to artificial intelligence — is highly copper-intensive.
Long-Term Outlook: Structural Deficits Ahead
Long-term forecasts point to mounting pressure on the copper market. According to BloombergNEF’s Transition Metals Outlook 2025, copper demand linked to the global energy transition could triple by 2045, potentially pushing the market into deficit as early as 2026.
Disruptions in Chile, Indonesia, and Peru, combined with a thin pipeline of new mining projects, could drive copper shortages to as much as 19 million tons by 2050 unless significant investment is made in new mines and recycling capacity. Analysts warn that rapidly rising demand is colliding with slow project delivery, creating a structural imbalance in the global copper market.
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