Copper prices experienced a slight pullback on Wednesday after US inflation data reignited speculation of a Federal Reserve rate hike this month. The news, combined with reports of a preliminary deal to avoid a strike at BHP’s Escondida mine, the world’s largest copper producer, reduced supply concerns. Comex copper for December delivery fell 0.8% to $6.6695 a pound, while London’s three-month copper climbed to $14,700 a tonne before easing to $14,532. The US consumer price data showed an acceleration in September, boosting the odds of a Fed rate hike to about 44%, according to the CME’s FedWatch tool.
Analysts have raised their copper price forecasts for 2026, with Macquarie, BMO Capital Markets, and BMI offering varying outlooks. Macquarie increased its 2027 average price by 14% to $12,750 and adjusted its long-term price to $10,500 a tonne in 2025 dollars. The bank described the current market as "very binary," with prices potentially moving higher or lower depending on the outcome of the Section 232 tariff decision. BMO Capital Markets, however, raised its long-term copper price by 47% to $16,000 a tonne in real terms, arguing that the US stockpile of nearly 2 million tonnes is a strategic reserve rather than surplus.
The market’s outlook hinges heavily on potential tariff decisions, with Macquarie outlining scenarios ranging from no announcement to a definitive decision against a duty. BMO expects no tariff decision before the US midterms in November, suggesting copper prices may "pause for breath" in the interim. Meanwhile, BMI forecasts a deficit from 2027, widening to 1.7 million tonnes by 2035, driven by demand from grids, EVs, and data centers. The International Copper Study Group recently adjusted its 2026 surplus forecast to 104,000 tonnes.