Copper Prices Plunge Towards Historic Lows Amid Supply Crisis

Global copper inventories have hit historic lows, triggering a 'historic scramble for metal' in the market. According to Deutsche Bank analyst Daniel Ghali, this shift from demand-driven dynamics to a supply liquidity crisis will lead to extreme price pressure. By Q2 2027, copper prices could reach $22,050 per metric ton, more than 50% above current levels.

The combination of continued US stockpiling, restocking demand, disruptions to refined copper supply, and an unexpectedly tight global supply-demand balance has put immense pressure on the market. Deutsche Bank estimates that if current trends persist, combined copper inventories held by the US and major Asian consumer markets could reach 71% of total global supply by year-end.

Ghali warns that even without tariffs, the metal may not necessarily flow back to other markets due to the premium on US copper futures. This could lead to a situation where some users seek to substitute aluminum for copper once prices surge sufficiently, driving demand substitution despite aluminum's lower electrical conductivity.