Copper
Forecast
Copper H2 2026: Supply Losses Are Real — the Question Is How Demand Responds
2026-05-23 · 4 min read · LME, ING, J.P. Morgan, Reuters
Copper rallied 47% in six months driven by real supply losses at Cobre Panama, Grasberg, and Las Bambas, a smelter TC/RC crisis, and trade flows reshaped by tariff uncertainty. The supply side is structurally tighter than at any point in the last decade. The question for H2 2026 is whether demand holds or price destruction kills the rally.
LME 3M$14,000+May 22, 2026
Record High$14,527Jan 29
ING Deficit600ktTripled forecast
LME StocksLow+34.72% YoY
LME copper hit $14,000+ in May 2026 — up 47% from Q4 2025. The rally is built on documented supply losses at four Tier 1 mines, a TC/RC collapse crushing smelter margins, and trade flows reshaped by tariff uncertainty.
$14,000+LME 3M copper, May 22, 2026Source: LME
Supply foundation: confirmed vs projected
CONFIRMED: Cobre Panama remains closed (~400 kt/yr lost) with no restart timeline. Grasberg at 50% capacity with full ramp-up not expected until late 2027. TC/RCs collapsed from $21/t in 2024 to -$90/t spot in March 2026, with the annual benchmark at $0. Chinese smelters are cutting output by more than 10%.
PROJECTED: ING tripled its 2026 deficit forecast from 200 kt to 600 kt. J.P. Morgan projects a 500 kt deficit. Total identified supply losses exceed 1 Mt/yr of mine capacity. The deficit is structural.
Demand foundation
Global copper demand grew ~3% in 2025 driven by electrification (FACT: IEA, CRU), data centres, and grid investment. The energy transition accounts for ~25% of demand growth. At $14,000/t, demand elasticity is the critical unknown.
Current$14,000/tMay 22
10% Move$1,400/tPer tonne
Three scenarios
Base case (55%): $12,000 – $14,000/t
Supply deficits hold prices elevated. Demand growth slows to 1-2%. LME stocks at 120-180 kt. TC/RCs stabilize at -$20 to -$50/t.
Bull case (20%): $14,000 – $16,000/t
Another major supply disruption deepens the deficit. LME stocks fall below 100 kt. Backwardation widens beyond $100/t.
Bear case (25%): $10,000 – $12,000/t
Global demand shock destroys 2-3% of demand. LME stocks rebuild above 250 kt. The deficit narrative breaks.
Scenario decision matrix
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| Scenario | Base (55%) | Bull (20%) | Bear (25%) |
|---|
| H2 Range | $12,000-14,000 | $14,000-16,000 | $10,000-12,000 |
| Signal | LME 100-200kt | LME <100kt | LME >250kt |
| Action | 50% fixed, 25% collar | 70% lock | 30% fixed, max spot |
What we do not know
- Cobre Panama restart timeline. A restart would add ~400 kt/yr back to supply. No timeline exists.
- Demand elasticity at $14,000+/t. Substitution risk is real but takes 2-3 years.
- Tariff trajectory. The 50% aluminum tariff is renewable every 90 days. Expansion to copper would reshape pricing.
What this means for buyers
Lock 50% of H2 volume at current levels using LME forwards. Float 25% with a floor at $11,500 via zero-cost collar. Leave 25% for spot. The single variable to watch: LME on-warrant stocks. Below 100 kt triggers bull case. Above 250 kt confirms bear case.
This forecast covers H2 2026. It will be reviewed on August 1, 2026, or earlier if Cobre Panama announces a restart or LME stocks fall below 100 kt.