Copper prices continue to soar, the biggest increase in 16 years! 2026 supply “earthquake” continues to detonate

The Zhitong Finance App learned that as investors bet that global copper supply will tighten in 2026 and take into account the impact of the weakening US dollar, copper prices will continue to rise. Copper prices rose 2.7% to 98,780 yuan per tonne on China's Shanghai Futures Exchange. COMEX copper futures rose 3% to $5.743 per pound, the highest level since shorting the market in July. LME copper futures rose 0.53% to $12,117 per tonne.

Over the past year, trade misalignment, geopolitical uncertainty, and supply shocks have all contributed to a sharp rise in copper prices. With only a few trading days left until the end of 2025, copper prices are on their way to their biggest annual increase since 2009.

Since this year, some of the world's largest copper mines have not been flat. In late May, a mine earthquake occurred at the Kamoa-Kakura copper mine, the fourth largest copper mine in the Democratic Republic of the Congo (DRC), which lowered its 2025 production guidelines from 520,000 to 520,000 tons. At the end of July, Chile's El Teniente mine, the world's largest underground copper mine, collapsed due to an earthquake. The Chilean State Copper Company, which operates the mine, said production will be reduced by 300,000 tons this year, which is about 11% lower than previously anticipated. US mining giant Freeport-Moc Moran temporarily suspended operations after a landslide occurred at Indonesia's Grasberg mine on September 8. The company has announced the initiation of force majeure clauses and expects its production to be significantly affected and continue until 2027. Freeport-Mockmoland has cut the 2026 Grasberg mine production guideline by 35%, which means a reduction in copper supply of around 270,000 tons.

At the same time, as the market generally predicts that the Trump administration may impose tariffs on copper next year, in order to evade tariffs, large quantities of metals, including copper, have recently been shipped to the US, and global copper stocks may soon fall to a critically low level, further increasing concerns about copper supply.

On the demand side, under the wave of rapid advances in global AI computing infrastructure, data centers are becoming a veritable “new copper mine”. Copper, a traditional industrial metal, has become a core material supporting the development of the artificial intelligence industry due to its irreplaceable electrical and thermal conductivity. The Morgan Stanley report predicts that in 2025, global data center copper consumption will be about 500,000 tons, accounting for 1.5% of total global copper demand; in 2026, this figure will increase to 740,000 tons, contributing 0.6 percentage points to the increase in global copper demand. By 2027, data center copper consumption is expected to reach 1 million tons (2.8% of total demand), and further increase to 1.3 million tons in 2028 (accounting for 3.3%), with a compound annual growth rate of 40%.

The tight pattern of supply at the mining side, compounded by the US's continued siphoning of global copper inventories, concerns about tight copper supply in non-US regions, and rising demand all provided important support for the rise in copper prices.

Goldman Sachs predicted a consolidation of copper prices in 2026 in a report released last week, but the long-term outlook remains positive. Goldman Sachs said, “Despite the recent rise in copper prices and the consolidation we expect in 2026, copper is still our 'most favoured' industrial metal, especially in the long term, because electrification (contributing nearly half of copper demand) means strong structural demand growth, and copper ore supply faces unique constraints.”

J.P. Morgan Global Research predicts that LME copper prices will reach 12,500 US dollars per ton in the second quarter of 2026, and eventually average about 12,075 US dollars per ton for the whole year. Citi is also bullish on copper prices. The bank's analyst Max Layton and others said, “We are convinced that copper prices will continue to rise until 2026. This is supported by multiple bullish catalysts, including gradually improving fundamentals and macro backgrounds.” They predict that global terminal copper consumption will increase by 2.5% next year, driven by a low interest rate environment and economic growth driven by US fiscal expansion, as well as Europe's restructuring of armaments and energy transition.