If gold is a gauge of fear, copper is often seen as a “thermometer” for the global economy. And right now, that thermometer is flashing a very unusual fever: copper prices have surged and repeatedly set new records, driven not only by classic supply–demand dynamics, but also turbocharged by U.S. tariff fears and physical hoarding.

An abnormal rally: tariffs are “pulling” metal into the U.S.

A key feature of this move is the price gap between the U.S. and the rest of the world. Copper on the London Metal Exchange (LME) recently traded around $11,515 per ton for 3-month delivery, while similar-dated U.S. COMEX copper futures sat near $11,814 per ton. That spread creates arbitrage: traders are incentivized to ship physical copper into the U.S. because selling there is more profitable.

This pull is largely rooted in expectations that Washington could impose duties on refined copper imports from 2027. Even the possibility of such policy action is enough for markets to front-run the outcome driving a sudden rise in demand and stockpiling.

Copper flooding into the U.S. is tightening supply elsewhere

According to StoneX data cited in the original piece, U.S. refined copper inflows have jumped by about 650,000 tons this year, lifting domestic inventories to roughly 750,000 tons. When metal is “vacuumed” into a region paying higher prices, supply outside the U.S. inevitably tightens—and the clearest signal of that shows up in LME inventories.

LME copper stocks now stand around 165,000 tons, nearly 40% lower than at the start of the year. More importantly, about 66,650 tons (~40%) are tied up in “canceled warrants,” meaning they’ve been reserved for physical delivery and are effectively no longer available to the market. When “free” inventory shrinks quickly, fears of a supply squeeze intensify and prices can react violently.

The long game: energy transition, AI, and electrification’s copper hunger

If tariffs are the short-term catalyst, the long-term foundation remains structural demand. Citi argues copper is supported by:

• Electrification

• Grid expansion

• Data-center and AI build-outs (power, cabling, cooling infrastructure)

All of these are copper-intensive: from cables and transformers to transmission systems and cooling for data centers. So even if cyclical end-demand softens at times, the “backbone” of copper consumption is difficult to reverse.

Supply isn’t cooperating: mine disruptions and downgraded outlooks

On the supply side, Deutsche Bank described 2025 as a “heavily disrupted year,” with setbacks pushing major miners to downgrade output expectations. Deutsche Bank-compiled data suggests recent updates have cut projected 2026 copper output by about 300,000 tons. The bank also sees a clear market deficit, with mine supply weakest in Q4 2025 and Q1 2026, implying tightness could peak in the first half of 2026.

Notable examples include:

• Glencore lowered its 2026 forecast to 810,000–870,000 tons, citing reduced procurement from Chile’s Collahuasi mine (co-owned with Anglo American).

• Rio Tinto expects 2026 copper output of 800,000–870,000 tons, down from this year’s 860,000–875,000 tons guidance.

Price targets: “stratospheric” may be plausible but risks are real

Citi sees copper potentially reaching $13,000 per ton in early 2026, and even $15,000 per ton by Q2 2026 in a bullish case. ING is more cautious but still expects $12,000 per ton in Q2 2026. Meanwhile, LME spot prices have printed as high as $11,816 per ton, and the benchmark is up about 36% year-to-date, with roughly 9% gains over the past month.

Still, one warning matters: this rally has shown signs of distortion because it’s driven heavily by tariff anticipation rather than pure fundamentals. If policy expectations shift or if the U.S. “pull” on physical metal fades the market could cool quickly. And higher copper prices can also compress margins in energy-intensive sectors, as ING noted.

Copper’s current setup blends three powerful forces: (1) a tariff-driven arbitrage pull into the U.S., (2) sharply thinning LME inventories, and (3) mine disruptions colliding with long-term demand from electrification and AI. This short-term shock plus long-term structural support is exactly why talk of “stratospheric new highs” in 2026 no longer sounds far-fetched.