Copper Prices Soar as Supply Constraints Take Center Stage

Copper prices have surged to record highs, with three-month metal on the London Metal Exchange (LME) reaching $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.

While some attribute the rise to U.S. tariffs, Frank Holmes, chief investment officer of U.S. Global Investors (NASDAQ:GROW), argues that supply constraints are the more significant factor driving copper's advance. He points out that global mine production fell 1.1% in the first half of 2026, with output dropping in major producers like Chile, Indonesia, and the Democratic Republic of Congo.

The International Copper Study Group (ICSG) reports that global mine supply is expected to decline by 2.6% annually, marking the first annual decrease since 2017. This drop is attributed to a decades-long decline in major copper discoveries and the increasing difficulty of bringing new deposits into production.