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Copper is on track for its largest annual price rise in more than a decade as US tariffs, supply disruptions and fears of a global shortage fuelled a frantic rally at the end of the year.
The red metal rallied to a record of more than $12,000 a tonne in December and has risen by more than a third in 2025 — the biggest yearly jump since 2009, when copper prices soared by more than 140 per cent as the world emerged from the financial crisis.
Analysts expect demand for the industrial metal to outstrip mined supply by the 2030s and for prices to remain elevated next year. The need for copper is growing as a result of the shift from fossil fuels to renewables such as wind and solar and the electrification of vehicles, and the boom in the construction of data centres that power artificial intelligence. But ageing copper mines are becoming less productive, and bringing new ones online is hugely expensive and takes years.
Sustained higher prices could result in some manufacturers opting for cheaper alternatives, or hit demand in areas deemed less essential such as decarbonisation, said Natalie Scott-Gray, senior metals demand analyst at commodity broker StoneX.
Rising prices were part of a “perfect storm” of factors that came together this year, including an easing of US-China tensions, talk of a Russia-Ukraine peace deal and the impact of US import tariffs, she said.
Many market participants are “talking about a structural [copper] deficit from 2026”, said Alastair Munro, base metals strategist at financial services group Marex.
The London benchmark price of copper has climbed to a series of record highs since October, after major accidents at three of the world’s largest mines ignited fears of shortages. Several big miners have revised down their production forecasts in recent weeks.
This year has also seen huge quantities of copper flow into the US, as importers rushed to get metal in before the imposition of copper tariffs by the Trump administration.
An unprecedented gap opened up between the London benchmark and US Comex copper prices as rumours about possible tariffs swirled, with traders looking to make money from the difference by buying London Metal Exchange metal and selling it on Comex.
In a surprise to markets, the levies ultimately exempted the copper cathode that had been flooding into the country. But Comex is still trading at a premium over the London price — reflecting fears that the US government might yet impose additional tariffs next year, analysts said.
Albert Mackenzie, a copper analyst at Benchmark Mineral Intelligence, said the market was reacting to a “pyre of bullish sentiment and supply concerns” set alight by “the match” of copper flooding into the US.
The volume stored in Comex warehouses has climbed to a record high of more than 400,000 tonnes, while stocks in the global LME network have fallen markedly this year, with LME stocks in Europe dwindling to less than 20,000 tonnes.
“The tightness we’re seeing at the moment is regional tightness, not global tightness, because of those stocks in the US,” Mackenzie said.
At the end of November — the latest data available — 85 per cent of the copper in LME warehouses was Chinese-origin metal, which is not eligible for delivery into US Comex facilities.
Nevertheless, one metals trader said they “and everybody else” were still shipping volumes into the US given the higher domestic prices. One way to keep doing this was to “swap” Chinese-origin material for Comex-eligible material sourced from elsewhere, such as sellers in the Middle East, they said. The dynamic was likely to continue into 2026 and to result in shortages outside the US, they added.
Alice Fox, commodities strategist at Macquarie Group, said copper prices would “remain strong” into 2026, despite slowing demand growth in China, the world’s largest consumer of the metal.
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