Copper could hit 'stratospheric new highs' as hoarding of the metal in U.S. continues
HS 14/12/2025
Copper prices have soared this year, hitting multiple record highs, fueled by supply disruptions and as fears over U.S. tariffs have led to a surge in demand. The rally is set to continue into 2026. Citi analysts expect prices of the red metal to skyrocket on the back of stronger demand led by the energy transition and artificial intelligence sectors. Electrification, grid expansion and data-center build-outs require large amounts of the metal for wiring, power transmission and cooling infrastructure. According to Citi, projected copper deficits due to constrained mine supply, and continued “hoarding” of copper in the U.S. due to arbitrage opportunities are expected to contribute to price surges: “We expect the U.S. to hoard global copper inventory and, in a bull case, draw further on depleted ex-U.S. stock.” The brokerage sees copper hitting $13,000 per ton in early 2026, and even $15,000 by the second quarter of next year. Similarly, Avatar Commodities’ CEO Andrew Glass sees copper prices hitting “stratospheric new highs,” especially as physical hoarding in the U.S. continues to erode international availability. The current rally reflects a “highly irregular distortion,” driven primarily by anticipation of tariffs rather than traditional supply-demand fundamentals, he said, adding that Chinese copper demand has disappointed in recent months. ING’s commodities strategist Ewa Manthey, who sees prices going up to $12,000 per ton in the second quarter of next year, said that higher copper prices are set to squeeze margins in energy-intensive sectors. Spot prices of the red metal, which is seen as a leading indicator for the global economy, hit another high on Friday at $11,816 per ton on the London Metals Exchange, with 3-month futures closing at $11,515. LME copper spot prices, which is considered the global benchmark, have gained about 36% so far this year, and are up 9% over the past month. The latest leg of the rally has been turbocharged by tariff concerns, experts told CNBC, with worries that Washington could impose duties on refined copper imports from 2027 leading to a surge in demand. “A huge amount of tightness has to do with U.S. tariff concerns with refined copper inflows into the U.S.,” said Natalie Scott-Gray, senior metals analyst at StoneX, in reference to copper supplies outside the U.S. According to data provided by the global financial services firm, refined copper inflows into the U.S. have jumped by about 650,000 tons over this year, pushing inventories in the country to roughly 750,000 tons. Because copper prices in the U.S. are higher than elsewhere, traders have a strong incentive to ship large amounts of copper into the country, said Scott-Gray. Tightening supplies Copper priced on the London Metal Exchange last traded at about $11,515 per metric ton for delivery in three months, while copper futures on the U.S. COMEX for March delivery were at around $11,814 per metric ton, creating arbitrage opportunities. That pull has tightened supply outside the U.S., especially copper stocks in the London Metal Exchange , which is often described as the market of last resort because it absorbs surplus copper when demand is weak and releases it when supply tightens elsewhere. LME inventory data is commonly interpreted as a barometer of broader market tightness. A growing share of LME copper stocks has been reportedly tied up in the so-called canceled warrants , meaning the metal has been reserved for physical delivery by other buyers and is effectively no longer available in the market, intensifying fears of a supply squeeze. Data published by LME last week shows copper inventories in the exchange stand at around 165,000 tons, with 66,650 tons, around 40%, marked for delivery. Inventory levels are nearly 40% lower compared to the start of the year. The copper rally is also underpinned by persistent mine disruptions that have dented expectations for future supply growth. In a note published on Wednesday, Deutsche Bank characterized 2025 as “a heavily disrupted year,” with production setbacks forcing several major miners to downgrade output estimates. Over the past week, several key copper producers have provided updated production guidance, reducing 2026 copper output by about 300,000 tons, data compiled by Deutsche Bank showed. “Overall, we see the market in a clear deficit with mine supply weakest in Q4’25 and Q1’26,” the bank said, anticipating peak prices and market tightness in the first half of 2026. Commodities trading giant Glencore lowered its 2026 production forecast to a range of 810,000 tons to 870,000 tons due to the lower procurement from major Chilean mine, Collahuasi, which it co-owns with Anglo American. Mining group Rio Tinto also expects copper production next year to drop between 800,000 tons and 870,000 tons, according to Reuters, compared to this year’s forecast of between 860,000 to 875,000 tons.
