Copper prices continue to trade in elevated territory as the market digests a complex mix of supply constraints, robust structural demand, and policy-driven regional distortions. LME three-month copper settled near $13,731 per metric ton on June 8, with COMEX futures at $6.34 per pound, reflecting the persistent premium in US markets driven by tariff expectations.
The global copper market is widely expected to shift into deficit in 2026 after a modest surplus in 2025. The International Copper Study Group projects a deficit of approximately 150,000 tonnes for 2026, while JP Morgan forecasts a larger shortfall of around 330,000 tonnes. The tightening is driven by severe disruptions at major mines: Freeport-McMoRan's Grasberg operation in Indonesia has seen output cut by 35% versus previous plans following a tailings leak and mud intrusion, and Ivanhoe Mines' Kamoa-Kakula in the DRC reduced output after flooding and earthquake-related issues.
On the demand side, AI data center construction and global electrification continue to drive structural copper demand growth. S&P Global forecasts copper consumption rising from 28 million tonnes in 2025 to 42 million tonnes by 2040, with grid modernization and EV infrastructure as primary drivers. Global data center capital expenditure exceeded $300 billion annually by 2024, and AI server deployments are growing at 40-50% per year.
Chinese demand has shown price sensitivity at these elevated levels. Copper imports fell 25% in the first two months of 2026 versus the prior year, and the Yangshan import premium has slumped. However, Chinese refined output grew 9% in 2025, adding one million tonnes of domestic supply, which partially replaces import needs.
LME warehouse stocks have fallen to approximately 231,000 tonnes, the lowest since February 2026, while COMEX inventories remain elevated at 585,000 tonnes due to pre-tariff stockpiling. The divergence reflects regional positioning rather than fundamental oversupply.
Copper buyers face a bifurcated market: US buyers are paying a significant premium due to tariff-driven stockpiling, while ex-US markets remain tight but accessible. With concentrate shortages constraining smelter output and mine disruptions limiting primary supply, 2026 forward contracts at current levels near $13,000-14,000/t may offer better value than waiting for a correction. Consider securing H2 2026 volumes on a fixed-price basis before the expected US tariff decision in June.