Copper prices have surged in recent weeks, rising by nearly 20% to a record of US$13,310/t on 12 January 2026. While strong fundamentals remain an important driver, trading activity and financial flows are increasingly fuelling the rally. Ongoing geopolitical tensions, macroeconomic uncertainty, and heightened M&A activity could keep prices elevated for longer.

Copper prices were highly volatile throughout 2025. Market sentiment through July and August was dominated by US tariff-related developments, which drove a divergence between COMEX and LME benchmarks.

From September onwards, supply-side disruptions became the key catalyst for higher prices. Copper’s fundamentals remain robust, underpinned by a deficit in the concentrate market, strong production at Chinese smelters, and historically low TC/RCs.

Beyond supply–demand dynamics, copper has increasingly been used by traders and global funds as a hedge against geopolitical uncertainty and inflation.

Looking ahead, prices are expected to remain volatile but supported above US$13,000/t over the next three months, with risks skewed to the upside given the market’s sensitivity to supply disruptions.

Although the recent rally has not yet resulted in a significant COMEX–LME divergence, the upcoming US Commerce review, which could impose a universal duty on refined copper imports from 2027–2028, may reintroduce upward pressure on COMEX prices.

Labour negotiations in Chile in 2026 present another key risk, with major contracts due for renewal. At the Mantoverde mine, strike action has already led to a near shutdown, with operations running on depleting stockpiles. Elevated prices may strengthen union wage demands, increasing the risk of further disruptions, whilst Chile’s new pro-business government adds uncertainty to labour dynamics.

Supportive macro conditions, including potential US monetary easing and a weaker US dollar, alongside increased M&A activity, could further underpin prices.

While high prices may ultimately prove demand-destructive, current conditions suggest copper prices could remain elevated for longer, even as medium- to long-term consumption growth becomes increasingly vulnerable, particularly in emerging markets.