Copper prices rebounded after Powell's dovish remarks, industry insiders see prices rising to $12,000 per ton.

After Federal Reserve Chairman Powell hinted at the possibility of another rate cut this month, copper prices rebounded. Industry insiders also suggest that copper prices could reach $12,000 per ton. Copper prices have been volatile in recent days due to geopolitical tensions. Boosted by Powell's speech, as of the time of writing, LME copper futures rose by 1.26% to $10,725.05 per ton. In his speech on Tuesday, Powell indicated that the Federal Reserve is likely to cut rates by another 25 basis points later this month, despite the severe impact of the government shutdown on its assessment of the economic conditions. Powell mentioned the slow hiring rate multiple times and pointed out that this situation could worsen. In recent months, copper prices have been supported by the prospect of a rate cut by the Federal Reserve and several major disruptions in global copper mine production. The most significant of these was the temporary suspension of operations at the Grasberg mine in Indonesia by the American mining giant Freeport-McMoRan after a landslide on September 8. The company has initiated force majeure and expects its production to be significantly affected and continue until 2027. Freeport-McMoRan has cut its 2026 Grasberg mine production guidance by 35%, meaning a reduction of around 270,000 tons of copper supply. In fact, several of the world's largest copper mines have been facing challenges since 2025. At the end of May, the world's fourth-largest copper mine, Kamoa-Kakula in the Democratic Republic of Congo, experienced a seismic event, leading to a downward revision of its 2025 production guidance from 520,000-580,000 tons to 370,000-420,000 tons. In late July, the world's largest underground copper mine, Chile's El Teniente mine, collapsed due to an earthquake. Operated by Chile's state-owned copper company, the company announced that this year's production will be reduced by 300,000 tons, about 11% lower than previously expected. These supply disruptions not only result in reduced copper production but also highlight the significant challenges that mining companies face in meeting the growing demand. Last week, copper prices soared to their highest level since May 2024. During London Metal Exchange Week, Kenny Ives, head of the trading department under China's mining giant CMOC Group Limited, suggested that copper prices could reach $11,000 per ton by the end of the year, or even $12,000 per ton. Nick Snowdon, Director of Metal Research at Mercuria Energy Group, also pointed out during the same event that given the severe supply disruptions and continuous inflow of investment funds into commodities, especially the metal market, reaching this higher level for copper prices would be "relatively easy." If this price point is reached, copper prices will hit a new record high. Copper prices previously set a record of $11,104.50 per ton in May 2024. However, there are also more cautious voices at the same event. Goldman Sachs analyst Eoin Dinsmore stated that the global copper market is still in surplus and is expected to rebalance next year. It is worth noting that in a report last week, Eoin Dinsmore also mentioned that copper prices are resetting into a new price range. Structural constraints on the supply side, strong demand in key sectors (such as power grids, AI, national defense), and potential strategic reserve actions have collectively pushed the bottom support for copper prices to $10,000 per ton. For investors, this means that the downside for copper prices is very limited, with $10,000 serving as a solid "new bottom." However, because the market is still slightly in surplus in the short term, and high prices will increase the supply of scrap copper and the aluminum substitution effect, there is also a clear ceiling of $11,000 for copper prices in the next two years.