Tightening supply drives copper prices to their largest annual increase in 16 years, and they continue to climb in the beginning of 2026.

In the face of tightening supply in the market, copper prices resumed their upward trend on the first trading day of 2026. As of press time, LME copper futures rose by 0.63% to $12,543.70 per ton. In 2025, trade dislocation, geopolitical uncertainties, and supply disruptions collectively drove copper prices significantly higher. LME copper prices rose by 42% in 2025, marking the largest annual increase since 2009, reaching consecutive historical highs in a strong rally at the end of last year. In 2025, several of the world's largest copper mines were not peaceful. In late May, a seismic event occurred at the Kamoa-Kakula Copper Mine, the world's fourth-largest copper mine located in the Congo (Kinshasa), leading to a downward revision of its 2025 production guidance from 520,000-580,000 tons to 370,000-420,000 tons. By the end of July, the world's largest underground copper mine, Chile's El Teniente Mine, collapsed due to an earthquake. The Chilean state-owned copper mining company operating the mine stated that production for the year will be reduced by 300,000 tons, about 11% lower than previous expectations. US mining giant Freeport-McMoRan temporarily suspended operations after a landslide at the Grasberg mine in Indonesia on September 8. The company has announced the activation of force majeure clauses, and expects its production to be significantly affected and continue until 2027. Freeport-McMoRan has lowered its 2026 Grasberg mine production guidance by 35%, meaning a reduction of about 270,000 tons of copper supply. At the same time, due to market expectations that the Trump administration may impose tariffs on copper in 2026, to avoid tariffs, a significant amount of metals, including copper, are being shipped to the US. Global copper inventories could quickly fall to critical low levels, further exacerbating concerns about copper supply. On the demand side, with the wave of rapid advancement in global AI computing infrastructure, data centers are becoming true "new copper mines." Copper, a traditional industrial metal, has become a core material supporting the development of the artificial intelligence industry due to its irreplaceable electrical and thermal conductivity properties. A Morgan Stanley report predicts that in 2025, global data center copper consumption will be around 500,000 tons, accounting for 1.5% of global copper demand; by 2026, this figure will increase to 740,000 tons, contributing 0.6 percentage points to global copper demand growth. By 2027, data center copper consumption is expected to reach 1 million tons (making up 2.8% of total demand), and further increase to 1.3 million tons by 2028 (3.3% of demand), with a compound annual growth rate of 40%. The tight supply situation at the mining end, coupled with the continuous drain of global copper inventories by the US, concerns about tight non-US copper supply, and demand growth, all provide important support for the rise in copper prices. JPMorgan Global Research predicts that LME copper prices will reach $12,500 per ton in the second quarter of 2026, averaging around $12,075 per ton for the year. Citigroup also sees copper prices rising, with analysts like Max Layton stating, "We believe 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 low interest rates and US fiscal expansion driving economic growth, as well as European rearmament and energy transformation efforts.