Copper surges to record high in ‘unsustainable’ rally, joining silver and gold in 2026 metals frenzy
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It’s not just silver (SI=F) and gold (GC=F) surging to record highs — copper is also ripping to a record as the metals complex continues to be the defining trade of 2026.
Copper futures (HG=F) were up 10% on Thursday morning, topping $13,000 per ton as supply chain disruptions, trade policy, and quickly growing demand have pushed prices higher. Priced per pound, copper is currently trading near $6.50; a year ago, prices were closer to $4.25.
Copper is essential for data centers and the other technologies underpinning the AI revolution, as well as for worldwide electrification efforts spanning electric vehicles to power-grid expansion.
Global demand for copper is now expected to surge from 28 million tons in 2025 to 42 million tons by 2040, but without meaningful supply expansions, the market will run up against a 10 million-ton shortfall, according to S&P Global. Even so, copper at its all-time high prices may not reflect reality, analysts say.
Instead, speculation and preemptive trading may have made the intense price action ungrounded.
“We see speculative positioning as overdone and unrelated to the realities in the market,” wrote StoneX senior metals demand analyst Natalie Scott-Gray. The metal looks “unsustainable with downward pressure likely to come.”
In late June, copper was trading on the London Metals Exchange below $10,000 per ton. Then, on July 8, President Trump announced he would impose a 50% tariff on imports of the metal, a move aimed at reducing reliance on foreign suppliers and strengthening the domestic supply chain.
As US tariff risk pushed traders to move copper into American channels to avoid these duties, buyers in Europe and Asia turned to LME warehouses to secure supply, draining visible stocks in London and signaling tight markets outside the US.
When the administration announced later in the month that the proposed tariffs would apply only to semi-finished copper products and copper-intensive derivatives — not to raw or refined copper — prices cooled, but not for long.
Portable Conveyor Belt Machinery At A Copper Mine In Chile ·EyeEm Mobile GmbH via Getty Images
The copper market has also been reeling from a series of real-world shocks, both on the supply and demand side.
As a result, analysts cut down their 2025 predictions for total copper output even as demand has exploded, powered by the AI boom and growing electrification.
EVs take nearly three times more copper to construct than gasoline-powered cars, and solar and wind electricity generation equipment, which accounted for roughly 90% of the new generation capacity installed, also require large amounts of copper, according to S&P Global.
“The intersection of accelerating demand, constrained supply, and concentrated processing capacity creates systemic risks that require responses from policymakers, regulators, industry, and investors,” S&P researchers wrote.
Demand for the metal from data centers alone could reach 475,000 tons in 2026, up from 2025’s 110,000 tons, said Gregory Shearer, head of base and precious metals strategy at JPMorgan.
“Data centers create inelastic demand in the market,” said Peter Schmitz, director of global copper markets research at Wood Mackenzie. “When developers require copper for the expansion of data centers, it is used with little concern for the copper price.”
But that doesn’t mean today’s copper prices properly reflect the market’s imbalance.
Given the White House’s swings on trade policy, there is a “very real potential that no tariffs are imposed on refined copper from the US,” said StoneX’s Scott-Gray.
Steel’s much more muted reaction to potential tariffs, for instance, also signals a potential speculation-driven mispricing on copper, Panmure Liberum analyst Tom Price noted.
“The fact that global/US steel markets quickly factored in his 25-50% import tariffs last year, without prompting an investor frenzy, revealed that they’re different,” Price wrote in a client note. “These physically dominated markets are not so easily overwhelmed by the speculative flows that have distorted those of their Precious/Base metal cousins.”
At the same time, a litany of expansions and new mining projects is starting to operate. Countries including Chile, the Democratic Republic of Congo, Brazil, and Iran are expected to push global output up by 2.3% for 2026 against 2025’s growth of 1.2%.
Demand in China, the world’s largest consumer of copper, for the refined version of the metal is expected to have fallen by 8% year-over-year in the fourth quarter of 2025, as the world’s second-largest economy faces a potential slowdown in 2026, according to analysts at Goldman Sachs.
That’s not to say copper prices won’t remain strong and above historical levels.
Copper is likely to be a key beneficiary of what’s shaping up to be a supercycle in metals, noted HSBC metals analyst Jonathan Brandt. But major copper mining-focused companies are currently pricing in a spot price of $5.49 per pound against the current $6.50 per pound, according to Jefferies analysts.
And in a sign that traders are unsure of how to read the copper market, the spread between the LME copper cash contract and the three-month forward price collapsed from more than $100 per ton to a roughly $26.50-per-ton discount in the week up to Jan. 28.
“While we have copper in a deeper deficit market year on year in 2026, we still do not see the market as historically out of balance,” Scott-Gray said. “Although supply risks do outweigh demand slowdown … fundamentals certainly do not support copper at the current levels.”
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
