The copper price is currently in a pronounced upward trend. Following a strong year in 2025 – copper rose by 43.93% according to a report by Sprott analysts – the momentum continued at the beginning of 2026. Meanwhile, the market is marking further records: the copper price reached $13,273.81 per tonne at times. It is striking that the movement is not described as a classic cyclical boom, but as a revaluation under increasingly tight fundamentals. Supply disruptions are said to have pushed the market into a deficit earlier than expected, while structural demand growth is increasingly overwhelming supply. At the same time, the strategic importance of raw materials is increasing in an environment of deglobalization and “de-dollarization,” which is additionally supporting the copper price, it said.
Copper: Records in a Market with Regional “Inventory Pools”
A central point in the experts’ report is the changed role of inventories. In previous years, exchange inventories and arbitrage could direct the flow of copper relatively flexibly to where metal was most urgently needed in the short term. This buffer function is now restricted by trade frictions and political uncertainty. This encourages stockpiling and directs deliverable material specifically to certain jurisdictions.
Specifically, the report describes a situation in which U.S. inventories are elevated, while availability outside the U.S. is tighter than global totals would suggest. For the copper price, this means that not only the “how much” but also the “where” of inventories is gaining in importance. Deliverability, location, and geopolitical risks can amplify the effect of the classic supply-demand balance – especially when the supply chain is already strained and deficits arise earlier than expected. The “inventory buffer” therefore behaves more like several regional pools than like a global inventory.
Equity markets also reflected this scarcity story in 2025: copper mining stocks benefited strongly, with +74.59% for copper producers and +132.42% for junior copper companies. The report interprets this as an expression of the operating leverage that mining stocks have when metal prices rise, and as a signal that higher prices make the feasibility and financing of projects more likely – especially for projects with U.S. ties and political tailwinds.
Supply Side Under Pressure: Disruptions and Processing Costs as a Warning Signal
The rally in the copper price is explained in the Sprott report essentially by an abrupt shift into a supply deficit. The trigger is said to be a cluster of relevant disruptions: The shutdown of the giant Grasberg mine in September 2025, in which an estimated 800,000 tonnes of mud flooded the mine, is described as particularly serious. The expected production loss until December 2026 is said to be so large, according to the report, that it even exceeds the annual production of the giant Collahuasi mine – which has exacerbated the supply pressure “overnight.”
In addition, there were further setbacks: The Kamoa-Kakula system recorded flood-related cuts of around 300,000 tonnes, the raw materials group Teck reduced its forecasts by around 60,000 tonnes across several operations, Codelco’s El Teniente operation lowered expectations by 33,000 tonnes after an accident, and the ongoing closure of First Quantum’s Cobre Panama mine continues to correspond to a loss of over 300,000 tonnes of supply. The report puts this in a structural context: Unplanned outages have historically averaged about 5% of global supply – only today this is meeting less flexibility in the system, longer development times, declining ore grades and a phase in which the industry cannot quickly “invest away” supply gaps.
The report sees another stress signal in the so-called Treatment Charges (TCs), i.e. the fees that smelters receive for processing copper concentrate. The annual benchmark TC for 2026 has fallen to $0 (after $21.25 in 2025) – and 2025 was already described as exceptionally low compared to often significantly higher levels in the past. The situation is even more pronounced for spot TCs, which have slipped deeper into negative territory. This is relevant for the copper price because falling TCs indicate a shortage of concentrate compared to processing capacity, making the entire chain more susceptible to delays and disruptions.
Politics and Demand Shift: Section 232 Risk and “Strategic” Copper Consumption
In addition to supply and inventory logic, the Sprott report emphasizes political drivers. The focus is on the Section 232 risk in the USA. On July 30, 2025, a proclamation was issued providing for blanket 50% tariffs on semi-processed copper products and copper-intensive derivatives (effective August 1, 2025). Unlike initially expected, however, refined copper was not directly subject to a tariff. This shift – from a temporarily priced-in tariff path to “0%” on refined metal – created an unusual U.S. premium and directed supply flows to the U.S. in the short term. Even though this premium has normalized again, the concentration of inventories in the U.S. remains, and there is a clearly outlined path to possible tariffs on refined copper in the future.
According to the report, the next key date is June 30, 2026: Then, the U.S. Secretary of Commerce is to provide President Trump with an update on the domestic market, which could serve as the basis for a possible, gradual import duty on refined copper – 15% from January 1, 2027 and 30% from January 1, 2028 are mentioned. The report concludes that the Section 232 issue is not “disappearing.”
On the demand side, the report sees a shift towards strategic, less price-sensitive end uses. Copper is increasingly being traded as a critical material – driven by the expansion of power-intensive AI and data center infrastructure, defense spending and the modernization of power grids. As a key figure, the report mentions that electrical infrastructure has overtaken the construction industry as the largest demand pillar: The share has risen from 24% (2020) to 30% (2025), with further potential for growth. This mixture of structural demand and limited supply response supports the copper price even when classic economic signals are mixed.
In summary, the report paints a picture for 2026 in which the copper price is being held near record levels by several factors acting simultaneously: active political risks, a fragile supply profile, stress in the concentrate market and demand that is more strongly influenced by critical infrastructure than by pure cyclicality.
