Copper price nears $13,000 on tariffs woes, supply strain

[Ben Graham]

Copper prices surged toward $13,000 a tonne on Monday, capping a volatile year marked by mine outages and trade disruptions that have put the metal on track for its biggest annual gain since 2009.

Prices jumped as much as 6.6% in early trading, the largest intraday rise since 2022, before paring gains to trade about 1.6% higher by mid-afternoon in London. New York futures moved lower, erasing much of Friday’s 5% advance while the London Metal Exchange was closed.

Speculation that US President Donald Trump could impose tariffs on copper has been a key driver, prompting a surge in US imports and forcing manufacturers elsewhere into fierce competition for supply. That front-loading of shipments has helped sustain the rally even as demand softens in China, which accounts for roughly half of global consumption. Traders continue to treat copper as a barometer of industrial health, betting tariff risks will keep US-bound flows elevated.

Disruptions at mines across the Americas, Africa and Asia have tightened supply just as governments ramp up spending on electrification, renewable power and grid upgrades, all of which are copper-intensive. Investors are also pricing in rising demand from data centres and artificial intelligence (AI) infrastructure.

Copper’s tight supply and tariff risks set for a volatile 2026

Brendan Smith, CEO of SiTration, told MINING.COM the rally reflects short-term disruptions layered onto a deeper structural challenge. 

The market may not yet be in a clear deficit, he said, but recent mine outages, shifting tariff risks and accelerating AI-related demand have fuelled investor enthusiasm. 

Smith added that limited local processing capacity in major mining regions such as North America, South America and Australia has increased reliance on foreign refining, heightening geopolitical risk.

Policy uncertainty has amplified price swings, with analysts warning that tariffs on copper or copper-heavy goods could further disrupt trade flows and widen volatility between LME and CME prices. Some manufacturers have turned to aluminium where possible, while high prices have drawn more scrap into the market, factors that could temper gains if demand weakens, though substitution remains limited in many uses. 

Building new supply continues to be difficult as projects face slow permitting and rising costs. “Nearly everything the global economy wants to invest in is copper-intensive, including the energy transition and AI,” Benchmark Minerals copper analyst Albert Mackenzie told MINING.COM earlier this month.

Long-term game

Longer term, analysts see mounting strain. BloombergNEF’s Transition Metals Outlook 2025 forecasts copper demand linked to the energy transition could triple by 2045, pushing the market into deficit as early as 2026.

Disruptions this year in Chile, Indonesia and Peru, combined with a thin project pipeline, could drive shortages to as much as 19 million tonnes by 2050 without major investment in new mines and recycling.

Kwasi Ampofo, head of metals and mining at BloombergNEF, said the predicted copper market imbalance reflects rapidly rising demand colliding with slow project delivery.