It's one of the biggest talking points in City dealing rooms: whither the price of copper? Prices have surged 20% this year to a record $13,387/t on 16 January 2026. Supply and demand fundamentals remain an important driver, but speculative money is pouring in - from banks, trading houses, hedge funds and family offices.
It's one of the biggest talking points in City dealing rooms: whither the price of copper?Prices have surged 20% this year to a record $13,387/t on 16 January 2026. Supply and demand fundamentals remain an important driver, but speculative money is pouring in - from banks, trading houses, hedge funds and family offices.
Copper, and even aluminium, are becoming a hedge against inflation and geopolitical uncertainty.London-based consultancy Project Blue reckons copper prices will remain above $13,000/t over the next three months, with risks skewed to the upside "given the market's sensitivity to supply disruptions".Inevitably, there is renewed talk of a supercycle, which has already arrived for precious metals, but for the wrong reasons – global jitters, nothing to do with the green revolution!The bellwether for the transition away from fossil fuels remains copper – with forecast demand predicted to bring about significant supply deficits, accelerated by high copper-consumptive AI data centres. But is a new copper supercycle kicking off already? That's doubtful.Goldman Sachs reckons a continued global copper surplus will put the blocks on the metal exceeding much above $11,000 for a sustained period in 2026. "We do not expect the global copper market to enter a shortage any time soon," said Goldman's metals team.Commodity intelligence platform BigMint echoed the views of many, saying "the market looks convincingly tight on the surface, but is far less secure underneath."In short, there are well-founded suspicions that recent price strength has been amplified by factors that have little to do with underlying consumption. First there are the speculative financial flows. Second, there is the threat of tariffs on refined copper imports into the United States which has led to market distortions, namely ones that have pulled material into US warehouses, creating a fat premium between American and international prices. That's left inventories outside the US unusually tight, making it look as if there is a scarcity, even as stocks are bulging in American warehouses.As copper prices climb higher, there's another thing to consider: substitution. Goldman notes the ratio of copper to aluminum prices has reached a record 4.5:1, a level so high that industrial users are switching to aluminum, where possible. UBS and Morgan Stanley said aluminium is emerging as a copper substitute although copper's conductivity remains superior and a longer-term switch will be a slow and uneven process. Still, aluminum has risen to its highest price in three years and could go higher than its current $1.43 a pound as it attracts interest as a red metal substitute.Citigroup is more bullish and sees copper potentially exceeding $13,000/ton and approaching $15,000/ton in 2026 if supply shortages and low inventories persist. But Goldman said in a note on Friday: "High prices are likely to dampen demand growth and lift scrap supply this year, and this expectation leads our researchers to boost their global surplus forecast for 2026 to 300kt from a previous outlook for160 kt.China's consumption of refined copper has weakened materially, and a clear decision on US refined copper tariffs should serve as a "catalyst for a correction", said Goldman. Further out, most banks believe the long-term bull case for copper remains intact.
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