Copper Prices Head Into Uncharted Territory

Copper prices have shattered previous records, approaching the $12,000 per ton mark as a "perfect storm" of structural deficits and trade policy distortions grips the market. 

On the London Metal Exchange (LME), copper futures recently reached an intraday peak of $11,982, following a relentless year-end rally.

The benchmark LME price is now up nearly 40% year-to-date, marking its strongest annual performance since 2009 and cementing its position as the top-performing major commodity of 2025.

The immediate trigger has been a sharp rise in orders to withdraw copper from LME warehouses, especially in Asia, a signal that physical inventories are being drained. At the same time, US copper futures have surged even further, creating a widening arbitrage that incentivizes traders to redirect metal toward American ports. 

That dynamic has been driven by expectations that President Donald Trump could impose tariffs on primary copper imports as early as 2027, following earlier announcements and policy reversals that have kept markets on edge.

China has also played a role. Beijing’s commitment to a proactive fiscal stance and moderately loose monetary policy has reinforced demand expectations, while stronger-than-expected exports pushed China’s trade surplus beyond $1 trillion. Against that backdrop, copper’s role in electrification, data centers, and electric vehicles has only strengthened its appeal.

What Does This Mean for Me?

Supply constraints are adding fuel to the rally. A series of mine disruptions has curtailed output, while smelting capacity continues to grow faster than new mining projects can come online. Inventories are already thin, and analysts now warn that global refined copper markets could face a shortfall of around 450,000 tons by 2026 if current trends persist.