Copper Prices Soar Amid Deteriorating Supply and Generational Decline
Copper prices have reached record highs this week, with three-month metal on the London Metal Exchange (LME) touching $14,779 a ton and New York futures crossing $3.74 a pound.
The red metal is up roughly 24% this year and about 51% over the past 12 months, beating the Mag 7 stocks.
The main explanation for this surge has been attributed to tariffs, with traders rushing metal into U.S. warehouses ahead of a proposed 15% duty on refined copper imports beginning in 2027, rising to 30% in 2028.
However, the author suggests that this trade may have ended last summer and instead points to deteriorating supply as the main driver behind copper's price increase.
The International Copper Study Group (ICSG) reports that global mine production fell 1.1% in the first half of 2026, with output dropping in Chile, Indonesia, and the Democratic Republic of Congo, three of the largest producers on earth.
Chile, the world's largest producer, just posted its weakest second quarter in at least 19 years and cut its full-year forecast for a second consecutive quarter, now guiding to a 2.6% annual decline.
A weak year for output is a headline, but underneath it sits what the author sees as a generational problem, a lack of new discoveries that can match the production levels of previous decades.