Copper in 2026: Scarcity or speculation? What is really driving the price

The price of copper continues to surprise. With an almost 30% increase this year, the red metal has become one of the most volatile assets in the commodities market. But behind these numbers lies an uncomfortable question: Will the price of copper continue to rise in 2026? Or, on the contrary, are we facing a bubble fueled by investor panic.

The real reason for the rise: Supply crisis or market hysteria

The numbers are clear. Copper reserves on the London Metal Exchange (LME) have been drained at an accelerated rate, while simultaneously, a series of historic mining strikes have threatened the entire global supply chain.

The Grasberg mine in Indonesia, the second largest in the world, suffered an unexpected collapse after a landslide. Almost at the same time, Kamoa-Kakula in the Democratic Republic of Congo was flooded by seismic activity, forcing operators to cut their production projections by 28% for the year. In Chile, El Teniente, the world’s largest underground copper mine, also halted operations for several days after a collapse, losing between 20,000 and 30,000 tons of production.

These events are not isolated coincidences. They represent a pattern: the fragility of the global mining infrastructure is exacerbating the tension between supply and demand. And here, another factor that few analysts mention comes into play: U.S. tariff policies.

Tariffs, critical minerals, and the geopolitics of copper

Washington has made a decision that changed the game. Not only did it raise tariffs on copper imports, but it also included the metal in its “Critical Minerals List” — recognizing it as a vital strategic resource for U.S. national security.

This classification has created an expanding ripple effect in the market. Countries and companies are now stockpiling reserves to secure their future supplies. Traders are rerouting their transportation routes. The supply chain, already under pressure, is now in a state of panic.

The result: unprecedented volatility in prices and an upward trend that seems detached from actual economic fundamentals.

Why AI is the real demand driver

While headlines talk about mining and tariffs, there is a deeper force transforming the copper market: the explosion in demand for artificial intelligence.

AI is not built solely with silicon. Although chips are the “brain,” copper is the nervous system. Inside each GPU running models like ChatGPT, copper forms tiny cables transmitting signals at extreme speeds. Copper alloys dissipate heat that would otherwise destroy these processors.

But demand goes far beyond chips. AI data centers consume monumental amounts of energy, and copper is essential throughout the electrical network that powers them: cables, transformers, liquid cooling systems. Without copper, there is no AI.

Moreover, AI depends on peripheral sectors that are also copper-intensive:

• Electric vehicles: Sensors, electronic control systems, all depend on copper
• Renewable energy: Solar panels, wind turbines, and the transmission networks connecting them require massive amounts of copper
• 5G communications: Antennas, filters, and all base station infrastructure
• Future technologies: Advanced chip packaging, quantum computing, brain-machine interfaces

The equation is simple: the more AI advances, the greater the global demand for copper. And that demand shows no signs of slowing down.

The geography of copper: Andes vs. Central Africa

Global copper production is geographically concentrated in a way that increases market vulnerability. Chile and Peru, located in the Andes mountain range, account for more than half of global production. Escondida in Chile is the largest mine in the world, followed by the world-class operations of Collahuasi and Las Bambas in Peru.

The problem: these mines are maturing. Mineral concentration naturally decreases over time, meaning more rock must be mined to obtain the same amount of copper. Additionally, tensions with local communities and environmental challenges are slowing expansion.

Meanwhile, the Democratic Republic of Congo and Zambia in Central Africa have become the fastest-growing regions for copper production worldwide. Deposits like Kamoa-Kakula promise to increase supply, but as we have seen, they are also exposed to unique operational risks.

The main global producers remain:

1. Chile — Escondida, Collahuasi
2. Peru — Las Bambas, Cerro Verde
3. DR Congo — Kamoa-Kakula (fast growth)
4. China — Major consumer and secondary producer
5. United States — Operations in Arizona and Utah, including Bingham Canyon

Monetary policy: Weak dollar as an accelerator

Another factor amplifying copper price movements is the Federal Reserve’s monetary policy.

When markets expect the Fed to cut interest rates, the US dollar tends to weaken. A weak dollar makes dollar-denominated commodities like copper more attractive to international investors, pushing prices higher. This effect has been clear in recent months and will continue to be a factor of amplification in 2026.

What do banks say? Divergent forecasts for 2026

Major financial institutions have issued projections about the future of copper prices, but their views diverge significantly:

Goldman Sachs has adopted a cautious stance. It revised its projection upward for the first half of 2026 to $10,710 per ton (from 10,415), anticipating an annual average of $10,650. However, its analysis emphasizes a critical point: global copper supply remains sufficient to meet actual demand. According to Goldman, the recent price rally mainly reflects market concern over a possible future shortage, not current conditions.

UBS offers a more optimistic and progressive outlook:

• March 2026: $11,500/ton
• June 2026: $12,000/ton
• September 2026: $12,500/ton
• December 2026: $13,000/ton (annual target)

JPMorgan places its most aggressive projection at $12,500 per ton for the first half of 2026, arguing that severe supply chain disruptions and global inventory imbalances justify this escalation.

The divergence among banks reflects an uncomfortable reality: no one is entirely sure. Fundamentals point to insatiable demand driven by AI, but supply still has some short-term response capacity.

How to trade copper in 2026

For investors looking to get exposure to copper, there are multiple channels:

Structured futures:

• LME (London): The global epicenter of copper trading, international price reference
• COMEX (New York): The most important futures market in North America
• SHFE/INE (Shanghai): Yuan-denominated contracts reflecting Asian dynamics

Access for individual investors:

• Direct copper futures
• Copper ETFs that track futures (physical copper ETFs are extraordinarily scarce)
• CFDs (contracts for difference)
• Shares of specialized copper mining companies

Physical trading: Mainly off-exchange, involving miners, smelters, and global traders like Trafigura or Glencore.

Conclusion: A market in transition

Copper prices will remain volatile in 2026. The fundamental question is not if they will rise, but by how much. Mining strikes have exposed supply fragility. U.S. policies have introduced geopolitical uncertainty. And demand driven by AI seems unstoppable.

What is clear is that copper is not just a metal. It is a proxy for the global tensions between security, technology, and resources. Investors who understand this dynamic will have a competitive advantage in the months ahead.

(The opinions expressed in this analysis are for informational purposes only and do not constitute investment advice.)