Copper Price Falls Despite Bullish Call as Supply Concerns Linger
Copper prices have been falling, despite a bullish call from economist Steve Hanke. He told his followers to stay long on copper six days ago, hours before the rally stalled. The price of copper on London's LME is now trading near $6.30 a pound, down almost 8% from its early August record.
The supply case behind Hanke's call has not changed. Global mine output fell 1.1% in the first half of 2026, according to International Copper Study Group data. This is the first annual decline since 2017. The main culprit is Freeport-McMoRan's Grasberg mine in Indonesia, which is still running at roughly half capacity after a fatal landslide.
Chile has also cut its national production forecast again. Ore grades are deteriorating, forcing miners to move more rock for less copper. This squeeze pushed copper to a record above $14,600 a ton this month. However, the recent decline has some analysts questioning whether the shortage story can survive the selloff.
A new source of demand is emerging from AI facilities, which require large amounts of copper. Analysts estimate that AI facilities alone could add roughly 475,000 tons of demand this year. This is why forecasts now vary wildly, with Morgan Stanley expecting a 600,000-ton deficit and JPMorgan seeing 330,000 tons.
The chart is already flashing caution, with copper forming what looks like a triple top and breaking below $6.53. It's testing support near $6.29, and a deeper fall could bring $5.90 into play. Washington added more pressure after delaying a tariff decision on refined copper imports, sending metal back into LME warehouses.