Copper prices continue to surge, hitting the largest increase in 16 years! The "earthquake" in supply continues to explode in 2026.

With investors betting that global copper supply will tighten in 2026 and factoring in the impact of a weakening US dollar, copper prices continue to rise. Copper prices on the Shanghai Futures Exchange rose by 2.7% to 98,780 yuan per ton. COMEX copper futures rose by 3% to $5.743 per pound, reaching the highest level since the short-squeeze market in July. LME copper futures also rose by 0.53% to $12,117 per ton. Trade dislocations, geopolitical uncertainties, and supply shocks have collectively driven copper prices sharply higher over the past year. With only a few trading days left until the end of 2025, copper prices are heading towards the largest annual gain since 2009. Several of the world's largest copper mines have faced disruptions this year. In late May, a seismic event at the Kamoa-Kakula copper mine in the Democratic Republic of the Congo, the fourth-largest copper mine globally, led to a downgrade in its 2025 production guidance from 520,000-580,000 tons to 370,000-420,000 tons. At the end of July, the world's largest underground copper mine, El Teniente in Chile, experienced a mine collapse due to an earthquake. The state-owned Chilean copper company operating the mine announced a reduction of 300,000 tons in production for this year, about 11% lower than previous expectations. On September 8th, US mining giant Freeport-McMoRan temporarily suspended operations at the Grasberg mine in Indonesia due to a landslide. The company has activated a force majeure clause and expects significant impacts on its production continuing until 2027. Freeport-McMoRan has lowered its 2026 production guidance for the Grasberg mine by 35%, indicating a reduction of about 270,000 tons of copper supply. Meanwhile, in anticipation of potential tariffs on copper by the Trump administration next year, there have been significant metal exports, including copper, to the US to avoid tariffs. Global copper inventories could quickly drop to critical low levels, further exacerbating concerns about copper supply. On the demand side, as the wave of rapid expansion of AI computational infrastructure surges globally, data centers have become the true "new copper mines," with copper, a traditional industrial metal, becoming a core material supporting the development of the artificial intelligence industry due to its irreplaceable properties in electrical conductivity and thermal conduction. A report by Morgan Stanley predicts that global copper consumption in data centers will reach about 500,000 tons in 2025, accounting for 1.5% of global copper demand, and this figure will increase to 740,000 tons in 2026, contributing 0.6 percentage points to global copper demand growth. By 2027, copper consumption in data centers is expected to reach 1 million tons, accounting for 2.8% of total demand, and by 2028, it will further increase to 1.3 million tons, accounting for 3.3% of total demand, with a compounded annual growth rate of 40%. The tight supply situation at the mining end, coupled with ongoing fears of an increase in global copper inventories outside the US, and growing demand, have all provided significant support for the rise in copper prices. Goldman Sachs predicted in a report last week that copper prices would consolidate in 2026 but remain bullish in the long term. Goldman Sachs stated: "Despite the recent rise in copper prices and our expectation of consolidation in 2026, copper remains our 'most favored' industrial metal, especially in the long term, as electrification (contributing to nearly half of copper demand) implies structural robust demand growth, and copper mine supply faces unique constraints." J.P. Morgan Global Research predicts that LME copper prices will reach $12,500 per ton in the second quarter of 2026, with an average of around $12,075 per ton for the full year. Citigroup also has a bullish outlook on copper prices, with analysts such as Max Layton stating: "We are confident that copper prices will continue to rise before 2026, supported by multiple bullish catalysts, including gradually improving fundamentals and macro backdrop." They predict that global end-use copper consumption will increase by 2.5% next year, driven by a low-interest rate environment and US fiscal expansion boosting economic growth, as well as Europe regrouping its defenses and transitioning to energy, pushing for a growth of 2.5% in global end-use copper consumption next year.