Key Points
- Copper prices surged after Christmas, capping their best year since 2009.
- A rush to ship copper to the U.S. to avoid future tariffs is tightening global supply.
- Recent mine accidents in Indonesia, Congo, and Chile have further reduced availability.
- Analysts are concerned that prices are too high as demand from China is weakening.
Copper prices jumped in a wild trading session as the London Metal Exchange reopened after the Christmas holiday. The metal is capping off its best year since 2009, with prices briefly surging more than 6% to nearly $13,000 per ton before settling. This latest spike shows just how tight the global supply has become.
A major reason for the rally is a renewed surge in copper shipments to the United States. President Trump’s plan to reconsider tariffs on metals in 2026 has traders scrambling to get their supply into the country now, which drains it from the rest of the world.
On top of this, a string of unplanned disasters has squeezed the market even further. A deadly accident at a major mine in Indonesia, an underground flood in the Congo, and a fatal blast in Chile have all cut into the global copper supply.
Looking ahead, long-term demand for copper appears very strong. The global push toward electrification requires massive amounts of the metal for new power grids, green energy infrastructure, and manufacturing.
Investors are also betting that the AI boom will drive even more consumption, as new data centers require large amounts of copper to meet their power demands.
Despite the excitement, some analysts are getting nervous. They warn that prices have climbed too high, especially since demand in China, the world’s top copper user, is actually weakening.
Some Chinese factories that use copper have already cut back production due to high costs. As of the close, London copper settled at $12,222 a ton, leaving traders to wonder if this record-breaking rally can last.
