Copper Market Heads into 2026 Tight Amid Tariff-Driven Supply Distortions
Copper | 2025-12-23 06:41:24
According to Benchmark Minerals, the tariff-driven arbitrage has distorted global trade flows.
By Paul Ploumis
SEATTLE (Scrap Monster): The global copper market is heading into 2026 under mounting pressure after a record-setting performance in 2025, with analysts warning that the balance between supply and demand remains tight but increasingly fragile.
On the London Metal Exchange, copper prices have climbed nearly 40% this year, marking the strongest annual gain since 2009. Prices surged beyond $11,800 per tonne, briefly trading above all previous highs as market participants rushed shipments into the United States ahead of potential import tariffs of up to 15% under a possible Trump administration.
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According to Benchmark Minerals, the tariff-driven arbitrage has distorted global trade flows. By October, an estimated 730,000 to 830,000 tonnes of copper were effectively stranded in the US, inflating CME warehouse inventories while tightening availability elsewhere and pushing regional premiums sharply higher.
Despite the sharp rally, experts caution that copper’s price surge has partially decoupled from near-term fundamentals. In the meantime, long-term demand linked to electric vehicles, artificial intelligence, and the energy transition remains compelling.
Looking ahead, analysts remain structurally bullish on copper, but note that a large share of diverted supply is sitting in storage or tied to financial positioning, leaving the near-term outlook more complex than headline prices suggest.
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Which factor will have the biggest impact on copper prices in 2026?
Frequently Asked Questions
- How did global copper prices perform in 2025?
Copper prices surged nearly 40%, marking the strongest annual gain since 2009, briefly exceeding $11,800 per tonne.
- What factors contributed to this price rally?
Tariff-driven US arbitrage, tight global supply, and strong speculative positioning fueled the price surge.
- How has the US market affected global copper supply?
An estimated 730,000–830,000 tonnes of copper were stranded in the US by October 2025, tightening availability elsewhere and raising regional premiums.
