Copper Prices Driven by Supply Concerns, Not Demand

Copper prices have surged to new heights in recent months, but the underlying dynamics driving this rally are not what they seem. According to Breakwave Advisors, the current copper prices are largely a supply story rather than a demand one.

The main copper futures contracts on the London Metal Exchange and Comex are trading around 17% and 15% higher than at the beginning of the year, respectively. However, the real driver behind this price action is not an increase in demand, but rather a decline in global copper inventory and seaborne export volumes.

Data from Signal Ocean shows that global seaborne exports of copper concentrates declined by 10.8% in the first eight months of the year compared to the same period in 2025. This weakness began in November last year, with August's export volumes being a whopping 31.1% lower than in the same month a year ago.

The largest exporter of copper concentrates, Chile, recorded a year-on-year decline of 4%, while Indonesia's near-total retreat from the seaborne market accounts for a substantial part of the global decline in volumes. China, being the largest importer of copper concentrate, has also seen exports bound for it facing headwinds, with volumes shrinking more than the global decline.

The soft seaborne export volumes suggest that copper prices will remain high in the coming months, but the production upside will be limited in the short to medium term. Demand will play a role in pricing over the coming months, but its impact will be a moderating factor rather than a primary driver.