Copper Prices Surge to Record Highs!

Driven by tight global 铜 supply and concerns over potential U.S. tariffs, international copper prices have continued to hit all-time highs. On December 4th, London Metal Exchange (LME) copper prices breached the $11,500 per ton mark in one fell swoop, setting a new record. On December 5th, LME copper closed at $11,641.5 per ton, soaring to another historic high with a cumulative increase of 32.77% so far this year.

Industry insiders attribute the current rally to multiple factors. Firstly, tight global supply has boosted prices. Following a mine collapse in Chile, global mining and commodities giant Glencore recently announced it would slash this year’s 铜 production to 850,000-875,000 tons—nearly 40% lower than 2018 levels—while also revising down its 2026 copper output forecast. Secondly, the market widely expects the Trump administration to impose additional tariffs on copper next year. Analysts note that to avoid tariffs, large volumes of metals including copper have been shipped to the U.S. recently, and global copper inventories may soon drop to critically low levels. Finally, strong global demand for copper—such as explosive growth driven by power grid and electrical infrastructure upgrades—has also contributed to the price surge.

Reportedly, data from the International Energy Agency (IEA) shows that even with high production, the global copper supply deficit will reach 20% by 2035. Goldman Sachs recently released a report predicting that copper prices will enter a new high-price trading phase starting next year.

Tariff Expectations Drive Copper Flows to the U.S.

Tariff policies and rate cut expectations have triggered a wave of cross-market arbitrage. On December 2nd, Swiss energy trading giant Mercuria Energy Group canceled over 40,000 tons of copper inventories from LME warehouses in Asia, with a total value of $460 million. This move pushed the total number of canceled LME copper warrants to 56,875 tons on the day, accounting for 35% of the exchange’s total inventories—with Mercuria’s operation alone accounting for approximately 24%. Canceling warrants means the copper is marked as “withdrawn for shipment” and no longer counted as available inventory.

The core driver behind this “copper rush” is the cross-market arbitrage window created by U.S. tariff expectations. Although refined copper received a temporary exemption from tariffs effective August 2025, U.S. President Trump has pledged to revive the tariff plan in 2026. This expectation has led to U.S. copper futures prices on the Chicago Mercantile Exchange (CME) remaining significantly higher than LME copper prices.

Senior metals analyst Andy Home stated that as long as the CME premium covers transportation costs, the arbitrage window will remain open. Currently, the premium for 3-month forward contracts is around $500 per ton, which is sufficient to cover shipping expenses.

Driven by this, U.S. refined 铜 imports surged by more than 100% year-on-year to 1.19 million tons between January and August this year. Inventories in COMEX-registered warehouses have also skyrocketed from 85,000 tons at the start of the year to nearly 400,000 tons, accounting for half of the world’s total exchange inventories. Meanwhile, LME inventories—seen as the “global market reservoir”—have been rapidly depleted, with available stocks once falling below the critical 100,000-ton level. To seize the window, trading giants including Mercuria, Trafigura, and Glencore are scrambling to ship copper from around the world to the U.S.

Traders believe that to avoid potential tariff risks, a large amount of copper is accelerating its flow to the U.S., which may soon lead to low inventories in other regions globally.

Mercuria senior trader Kostas Bintas warned that if this trend continues, markets outside the U.S.—especially Asia—may soon face a substantial shortage of cathode copper, triggering a new round of accelerated price increases.

Will Copper Become the “New Oil”?

Beyond short-term arbitrage, the deeper support for the current 铜 price surge comes from the structural demand boom driven by artificial intelligence (AI) and global energy transition. Goldman Sachs clearly stated in a September report that copper will become the “new oil.”

It is reported that the rapid development of AI will become a major variable in copper demand in the future. Cui Zhaorui, a researcher at the Copper Division of Mysteel, noted that new AI and data center demand for copper is reflected in hardware manufacturing, circuit connections, and power transmission. AI requires high-performance processors, while data centers need high-speed, low-latency network connections and massive power supply to ensure operation—these demands are bringing new growth momentum to the consumption of copper-related products such as copper foil and copper cables.

Faced with historically high copper prices, Wall Street investment banks have shown significant divisions in their views. Bulls argue that a structural shortage has begun. Citigroup predicts that driven by loose interest rates, U.S. fiscal expansion, and energy transition, copper prices will reach $13,000 per ton in the second quarter of 2026. JPMorgan defines the current phase as a “faster, more bullish mid-game,” believing that the “siphon effect” of the U.S. market will force non-U.S. buyers to continue snapping up spot copper. The bank forecasts a global refined copper supply deficit of approximately 330,000 tons in 2026 and expects copper prices to touch $12,500 per ton in the second quarter of the same year.

The cautious camp, however, believes that current prices have deviated from fundamentals. Goldman Sachs analysts predict a global 铜 surplus of 500,000 tons in 2025, so prices may struggle to stay above $11,000 per ton in the long term, and a real global supply shortage is not expected until 2029. Macquarie Group stated that while prices may fluctuate and hit new highs, levels above $11,000 per ton are unsustainable because the global market is not actually facing tight supply.