Copper prices hit a record high! Supply crisis strikes, will it continue to rise in 2026?

Investment Insights - Under supply constraints and expectations of interest rate cuts, copper prices may rise to $13,000/ton by 2026.

On December 1, the price of London copper (LME copper) rose to $11,292/ton, setting a new historical high. Since the beginning of 2025, London copper has accumulated a 29% increase.

Analysis indicates that the reasons for this round of copper price increase are primarily due to supply constraints and rising expectations of interest rate cuts by the Federal Reserve.

Due to a series of mining supply disruptions, global copper supply is tightening. Additionally, due to tariff expectations, traders are transporting large amounts of metal to the higher-priced U.S. market, leading to the risk of depletion of copper inventories in other regions.

【Source: Mitrade; 2025 LME copper price trend】

Will copper prices continue to rise in the future?

Codelco, the world's largest copper producer, has proposed to some buyers that the supply premium for the 2026 annual contract will be $350 per ton higher than the London Metal Exchange (LME) price.

Codelco's pricing typically sets the benchmark for the industry, and the $350 premium represents a significant increase from the $89 agreed upon this year.

Senior officials at the London Metal Exchange have stated that given the uncertainty surrounding U.S. copper tariffs, copper prices on the New York Mercantile Exchange (COMEX) will carry a premium over LME prices, and this premium is likely to persist for the next 18 months.

"The CME (Chicago Mercantile Exchange, the parent company of COMEX) contracts have consistently shown a 2% to 3% premium, and I think it is safe to say that this has likely become a structural difference in the market and may continue," said Robin Martin, LME's head of market development.

Kostas Bintas, head of metals at Mercuria Energy Group, pointed out that profitable U.S. arbitrage trading is making a comeback, creating excellent opportunities for copper bulls. In the coming months, U.S. copper imports are expected to increase significantly.

The Chilean National Copper Corporation (Cochilco) has raised its average copper price forecast for 2026 to $4.55/pound (approximately $10,030/ton), setting a new historical high.

UBS expects copper prices to reach $11,500/ton in March 2026, rise to $12,000/ton in June, further increase to $12,500/ton in September, and set a target price of $13,000/ton for December UBS has significantly raised its expectations for the copper market supply deficit, predicting a deficit of 230,000 tons in 2025, which will nearly double to an astonishing 407,000 tons by 2026.

The bank stated that the decline in inventory and ongoing supply risks mean that the tight conditions in the copper market may persist for a longer time