Copper Market Tightens Amid US-China Competition
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Copper Market Tightens Amid US-China Competition
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The global copper market is experiencing significant tightening, with benchmark prices on the London Metal Exchange (LME) surpassing $14,000 per ton this week. This surge is primarily driven by a sharp increase in copper shipments to the United States and rising demand in China.
In July 2026, U.S. refined copper imports exceeded 200,000 metric tons, marking the highest monthly volume in over a decade. This influx has led to U.S. copper stockpiles reaching their largest levels in history, with combined COMEX and LME warehouse inventories in the United States exceeding 740,000 tons. This stockpiling is largely attributed to traders anticipating a potential decision by President Donald Trump on tariffs for refined copper imports.
Simultaneously, China, the world’s largest copper consumer, is also seeing increased demand and stepping up efforts to secure the metal. This heightened competition between the two economic powerhouses is creating trade dislocations and contributing to the tightening global supply. Inventories in LME warehouses outside the U.S. have declined sharply as metal is diverted to American ports to capitalize on higher prices and the COMEX copper in New York continues to trade at a significant premium to the LME.
Beyond the immediate trade dynamics, long-term demand for copper is being bolstered by global electrification trends, including renewable energy projects, electric vehicles, and the expanding infrastructure for artificial intelligence (AI). For instance, AI data centers require substantial amounts of copper for cabling, cooling systems, and power grid upgrades. S&P Global projects that global copper demand will reach 42 million metric tons by 2040, with data center usage alone potentially accounting for 2.5 million metric tons.
Despite the current price surge, some analysts, like Goldman Sachs Research, anticipate that copper prices may decline somewhat in 2026 to a range of $10,000-$11,000 per tonne, citing a projected global surplus of supply. However, they remain bullish on copper prices in the longer term, expecting demand to outpace supply from 2029 onwards. Other forecasts, like UBS, are more bullish, predicting copper could reach $15,500 by June 2027 due to deepening supply shortages. Overall, the interplay of geopolitical factors, trade policies, and robust demand from emerging technologies is creating a complex and dynamic environment for the global copper market.