Copper price hits record in London on supply worries
Copper advanced to a record in London on Wednesday, as the prospect of easing in US-China trade tensions provided a fresh catalyst to a rally built on supply setbacks and tariff-driven trade dislocations.
Three-month future contracts rose to as high as $11,146 a ton on the London Metal Exchange, topping a previous peak set last year. This places copper on course for its best performance since 2017, having risen over 24% year to date.
“Copper prices are being supported by a pick-up in risk appetite on optimism about a potential trade deal between the US and China,” Craig Lang, a principal analyst at CRU Group, told Bloomberg. The metal has also been supported by the concerns about physical tightness in markets outside of the US, he added.
Tumultuous year
Copper — an industrial staple and a proxy for global economic growth — has had a tumultuous year, as confusion around US trade policy caused extreme price distortions between New York and the rest of the world.
In July, US copper prices soared to a record in anticipation of proposed tariffs on the metal, but plunged right after President Donald Trump unexpectedly spared commodity-grade copper from the levies. Still, the price dislocation led to copper continuously gravitating toward the US as traders sought to profit from the arbitrage opportunity, exacerbating strains on supply for buyers elsewhere.
Meanwhile, unforeseen setbacks at major mines in Africa, Chile and Indonesia are piling on the pressure, potentially sending the copper market into a sizeable deficit heading into the new year. Some of the biggest copper miners, including Anglo American and Teck, recently warned that their copper production may fall below expectations in 2026.
Tallied together, the production mishaps mean global annual copper production is on course to contract for the first time since the onset of the pandemic, according to CRU.
Analysts bullish
As the impact of global mine disruptions became clearer, analysts have been turning increasingly bullish on copper, with Citigroup calling for prices to hit $12,000 a ton in the first half of next year, while others are expecting that milestone to arrive even sooner.
Morgan Stanley predicts the global copper market will face its most severe deficit in more than 20 years in 2026, with mines worldwide spluttering and American inventories effectively stranded.
Yet, some observers remain cautious about copper’s trajectory, given the mixed outlook for underlying demand. While there’s long-term optimism about rising usage in renewable energy, electric vehicles and data centers, that’s being offset by more immediate anxiety about the burgeoning trade war.
“We still forecast ongoing weakness in China-centered global copper demand growth,” said Tom Price, senior commodities analyst at Panmure Liberum. “Any bounce in copper-trading returns is nice, but there’s an investor hangover on the way.”
Still, usage in China has proven relatively resilient so far, with Goldman Sachs anticipating demand growth of 5.3% for the year. This week, hopes have been rising that Trump and his Chinese counterpart Xi Jinping will soon strike a deal to dial down trade tensions between the world’s two biggest economies.