Copper Prices Soar Amid Deteriorating Supply

Copper prices have reached new heights this month, touching $14,779 a ton on the London Metal Exchange (LME) and $3.74 a pound in New York futures.

The metal has surged by about 24% this year and 51% over the past 12 months, outperforming the Magnificent 7 stocks.

One explanation for this increase is US tariffs on refined copper imports, but Frank Holmes at US Global Investors no longer thinks that's the primary driver.

The premium between New York and London has been flat all year, averaging about 1% with negative spreads in February and March. This suggests a tariff-driven trade would have blown out the spread as it did last summer.

Instead, Holmes attributes the surge to deteriorating supply, citing declining mine output: global production fell by 1.1% in the first half of 2026, with Indonesia, the Democratic Republic of Congo, and Chile reporting declines.

The International Copper Study Group (ICSG) reports that Chile's second-quarter output was its weakest in at least 19 years, and the country cut its full-year forecast for a second consecutive quarter to a 2.6% annual decline.