Copper Prices Poised for Further Gains Amid Supply Crunch
Copper prices are poised to reach even higher levels over the next three years due to strong global demand and a projected decline in mined production. The metal has already gained 45% globally over the past 12 months, with US copper prices rising 48%. Chinese demand remains robust, reflected in the Yangshan copper premium hitting $121 a tonne, its highest level since November 2022.
The energy transition, artificial intelligence, and data centers are driving consumption, while supply constraints are emerging. Global mined copper production is on track to fall in 2026 for the first time since 2017, driven by operational setbacks, lower ore grades, and mining disruptions. Chile, which accounts for 23% of global copper, is expected to see a 6.5% drop in mine output in the first half of 2026.
Deutsche Bank and Citi forecast supply growth of just 1% to 1.3%, respectively, against an expected mining decline of 1% to 1.5% across 2026 and 2027, creating a market deficit. The impending deficit builds on a decade-long structural bull run that has delivered a 245% gain, taking prices from $4,200 a tonne in 2016 to trading levels around $14,500.