(Jan 5): Copper surged to a fresh high on concerns over tighter supplies, as well as a risk-on mood in wider markets.
Benchmark futures rallied as much as 4.3% in London, touching US$13,000 ($16,726) a tonne for the first time. Traders have ramped up shipments to the US in recent weeks in anticipation of potential tariffs this year, reducing supplies elsewhere. In addition, the start of a strike at the Mantoverde mine in Chile was a reminder of scope for risks to shipments at a time of expanding global demand.
All base metals were stronger on Monday, as equities climbed aided by bets on technology shares. More broadly, investors were assessing the wider implications of the US seizure at the weekend of Venezuelan leader Nicolas Maduro, including Washington’s evolving stance toward the resources that are central to security and economic growth.
Copper, a metal vital for the energy transition, surged by 42% in 2025 to post the best year since 2009. Trump’s plan to revisit the question of tariffs on primary copper in 2026 revived the arbitrage trade that rocked the market earlier in the year, cutting availability elsewhere.
“We estimate the global refined copper market was in surplus in 2025, but metal/inventory flows were distorted by US tariffs that resulted in a material lift in US imports,” UBS Group AG analysts, including Daniel Major, wrote in a note Monday.
See also: World’s copper squeeze set to intensify on AI and defence spending, S&P says
The US holds roughly half of global inventories, but only accounts for less than 10% of global demand, according to UBS. That means there is a risk of lower supplies elsewhere. The cash-to-three month spread in London remains firmly in backwardation, a pattern that points to near-term tightness.
“Overall supply shortfalls, coupled with regional dislocation caused by US tariffs, are propelling copper,” China Securities Co analysts led by Wang Jiechao wrote in a note. The global copper market will see a shortage of more than 100,000 tonnes in 2026,” they said.
Three-month copper rose 4.2% to US$12,995.00 a tonne on the London Metal Exchange at 1:45pm local time.
Uploaded by Magessan Varatharaja
