Deutsche Bank Warns of Copper Price Surge to $10/lb Amid Inventory Squeeze

Deutsche Bank is warning of an impending copper shortage, one that could see prices surge to $10/lb by Q2 2027. The bank's analysis suggests that traditional supply-and-demand metrics no longer apply, and instead, the market is facing a severe inventory/liquidity squeeze.

The current global above-ground copper inventories are already at their lowest level since 1984, with an estimated 71% expected to be 'encumbered' by the end of 2026. This means that much of the available metal is locked up in strategic reserves or in response to tariffs, rather than being freely available to meet demand.

Deutsche Bank notes that the usual price mechanism, where nearby prices rise relative to later contracts (backwardation), is breaking down due to US tariff fears. Instead, an extreme shortage outside the US might not produce the expected LME backwardation, requiring the adjustment to take place through the outright copper price.

The bank forecasts a rise in prices to $20,900 per tonne next year and $18,500 in 2028 from $14,500 currently. They attribute this to stockpiling, which may worsen due to ongoing strategic reserve expansions and private sector stockpiling in the US.