The White House has yet to make a final decision on copper tariffs, but market participants are preparing for duties of around 15% on refined copper from January 2027, rising to 30% from 2028. Expectations of higher import costs have triggered a scramble to move copper into the United States, tightening availability elsewhere.
The threat of tariffs has turned what should have been a surplus this year into, at best, a balanced market, Robert Edwards, principal copper analyst at CRU, told Reuters recently.
In their January 2026 forecast, analysts at Goldman Sachs, the New York-based investment bank, expected copper prices to slide lower to $11,200 a tonne on the London Metal Exchange (LME) in the fourth quarter. The Frankfurt, Germany-based Deutsche Bank expected an average price of $12,125 per metric tonne this year.
The price has run well ahead of the estimates as the tariff-driven buying spree has resulted in a dramatic build-up of inventories in the US. Copper stocks held in Comex warehouses have climbed to a record 675,000 tonnes, while the country imported roughly 885,000 tonnes of copper during the first half of 2026.
Outside the US, however, supplies remain considerably tighter. LME inventories stand at around 238,000 tonnes, highlighting the drain of metal from international markets into America. Shanghai Futures Exchange inventories paint a similar picture. Chinese copper stocks surged to 326,000 tonnes in March, but have since fallen sharply to about 41,100 tonnes in August, indicating strong demand and tightening availability.
Traders have been shipping large volumes of copper to the US to avoid future tariffs, effectively creating a regional shortage elsewhere. While the US is now holding record inventories, metal availability in Europe and Asia has tightened, supporting prices outside the United States and amplifying volatility across global markets.
Lower-than-expected output from major mining jurisdictions including Indonesia, the Democratic Republic of Congo and Chile has weighed on supply growth. At the same time, the copper smelting industry has been grappling with an acute shortage of copper concentrate, resulting in treatment and refining charges falling to near-zero levels, a sign of intense competition among smelters for raw material.
Another factor constraining production is the supply of sulphuric acid, a key input in copper processing. Geopolitical disruptions and supply-chain constraints have strained sulphuric acid availability, creating additional pressure on the industry’s ability to ramp up output.
Copper demand remains robust
Even as supply growth struggles, demand for copper continues to strengthen across multiple sectors.The rapid expansion of artificial intelligence infrastructure and data centres has become a major driver of consumption. Copper is a critical component in power systems, cooling infrastructure and network equipment used by large-scale computing facilities.
At the same time, countries worldwide are investing heavily in electricity transmission and distribution networks. Massive upgrades to power grids, renewable energy integration projects and battery storage systems have increased demand for the metal.
The automotive sector is also contributing to the tight market. Electric vehicles require substantially more copper than conventional internal combustion engine vehicles, with industry estimates suggesting EVs use roughly six times as much copper as traditional cars because of their motors, batteries, and charging systems.
Adding to the bullish backdrop, institutional investors and hedge funds have become increasingly active in physical commodity markets, viewing copper as a strategic metal tied to electrification, energy transition and AI-driven infrastructure growth.
Market awaits tariff clarity
For now, traders remain focused on Washington’s next move. A formal tariff announcement could further reshape global trade flows and prolong the disparity between New York and London copper prices.
Until US trade policy becomes clearer, analysts expect the copper market to remain volatile, with tight global supplies and strong structural demand continuing to underpin prices despite record inventory accumulation in the United States.
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