Copper futures on COMEX settled at $6.23 per pound on Friday, recovering from a midweek dip below $6.05 that was triggered by renewed Middle East hostilities between the US and Iran. The bounce came as risk appetite returned to equity markets, led by semiconductor and AI-related stocks, and as reports indicated the US and Iran would continue peace negotiations. The metal remains 12.6% higher than a year ago and within striking distance of its all-time high of $6.67 set in June 2026.
The underlying story, however, is not about daily price swings. It is about a refined copper market that multiple major banks now forecast will swing to a deficit of 600,000 tonnes this year. That number, cited by analysts including CRU and Sprott, reflects a collision of three forces: mine supply that keeps disappointing, sulfuric acid shortages that constrain smelter output, and demand that refuses to buckle despite high prices.
Mine supply disruptions have been a persistent feature of the copper market since early 2025, but 2026 has brought a new dimension. Chilean production, which accounts for roughly 25% of global mined copper, has been hampered by declining ore grades at aging operations in the Atacama. Peru, the second-largest producer, saw output fall year-on-year in the first quarter due to community blockades and permitting delays. The Democratic Republic of Congo continues to add volume, but logistical bottlenecks and power availability cap the upside. The net result: global mine production growth is tracking well below the 3-4% that analysts had penciled in for 2026.
The sulfuric acid shortage is the less-discussed but equally critical constraint. Sulfuric acid is essential in the solvent extraction and electrowinning (SX-EW) process that produces roughly 16% of global refined copper. The Iran conflict has disrupted sulfur supply from the Middle East — the world's largest sulfur-producing region. Canadian sulfur exports have partially filled the gap, with non-metallic mineral export volumes rising 50% month-on-month in May, but the price of sulfuric acid has spiked nonetheless. Sprott describes the simultaneous convergence of mine disruptions and acid shortages in April as an acute event with direct implications for refined copper output.
US Section 232 copper tariffs add another layer of supply risk. The investigation, launched in 2025, has created what analysts call a "tariff premium" in COMEX copper relative to LME. US buyers have been front-loading imports to beat potential duties, drawing metal away from other regions and keeping LME inventories under pressure. Fastmarkets and Mining.com have both described the tariff uncertainty as a structural wedge between the two benchmark prices that could persist through 2026.
On the demand side, the picture is mixed but resilient. Chinese apparent demand rose in the first half of 2026, supported by grid infrastructure spending and electric vehicle production. The country's State Grid Corporation allocated a record budget for 2026, with high-voltage transmission projects consuming large volumes of copper wire and cable. European demand has softened as manufacturing PMIs dipped below 50 in Germany and France, but this has been offset by stronger-than-expected US construction activity and the ongoing buildout of data center capacity.
Goldman Sachs, in a mid-year update, forecasts LME copper to average $10,710 per metric ton in the first half of 2026 before declining somewhat in the second half as new mine supply from the DRC and Chile ramps up. However, Goldman's own analysts acknowledge that their supply growth assumptions have repeatedly proven optimistic. J.P. Morgan sees a wider range of $9,800 to $12,500, with the upper end reflecting a scenario where disruptions persist and Chinese stimulus accelerates. Trading Economics' consensus puts copper at $6.41 per pound by end of Q3 and $7.04 on a 12-month view.
Copper buyers face a market where the probability of a near-term price collapse has diminished significantly. The 600,000-tonne deficit forecast is not a single-bank call — it is converging across Goldman Sachs, CRU, J.P. Morgan, and Sprott. The sulfuric acid shortage adds a second supply bottleneck beyond the mine, and the tariff uncertainty creates regional price distortions that will not resolve quickly. For procurement teams, the practical implications are threefold. First, locking in fixed-price contracts for Q3 and Q4 delivery at current levels offers protection against a spike to $7.00/lb that several models flag as plausible if Middle East disruptions worsen or tariffs are imposed. Second, diversify sourcing away from Chile-only supply chains. Chilean premiums are widening, and Peruvian and DRC volumes — despite their own risks — offer price relief relative to the COMEX premium. Third, build inventory buffers where warehousing costs permit. The cost of carry is real, but being caught short during a 600,000-tonne deficit year is costlier. For buyers on formula-based contracts, understand whether your pricing references COMEX or LME — the tariff premium wedge means an LME-linked contract may save 5-8% relative to COMEX at current spreads.