Copper Prices Reach Record Highs Amid Global Supply Deficit and Tariff Fears

Copper prices surged to new record highs above US$14,300 per tonne in August 2026, driven by a deepening global supply deficit and traders moving physical copper into the United States ahead of a potential 15% import tariff proposed for January 1, 2027.

Jacob White, Director of ETF Product Management at Sprott Asset Management, attributed this rally to earlier expectations of a higher tariff that created a significant premium for U.S. copper prices relative to European markets, encouraging additional imports and tightening global supply.

The long-term production challenges facing the industry were highlighted by White, pointing to Codelco in Chile, historically the world’s largest copper producer, where output has declined over the past two decades despite much higher copper prices.

The slow process of developing a new copper mine, with an average of about 17.5 years from discovery to production, limits the industry's ability to respond quickly to higher prices and meet growing demand driven by major sectors such as electricity grid expansion, AI infrastructure buildout, and defense spending.