LME three-month copper settled at $13,090 per metric ton on July 8, down $219 or 1.65% from the prior session, but still within the $11,000-13,371/t range that has defined trading since January 2026. COMEX copper at $6.12/lb (~$13,490/t) carries a roughly $400/t premium over LME, a dramatic compression from the $1.30/lb spread seen in mid-2025 but still well above the historical average of just 2.3 cents. The convergence reflects the unwinding of some tariff-driven arbitrage as the US-Iran framework deal and Strait of Hormuz reopening took risk premium out of energy costs and shipping routes. Yet the market remains structurally split: the US sits on a record 503,000 tonnes of COMEX-deliverable copper, while LME-registered stocks have fallen 38.6% since December 2024 to about 166,600 tonnes.
The International Copper Study Group (ICSG) released its April 2026 forecast update, flipping the refined balance for 2026 from an expected 150,000-tonne deficit to a small surplus of 96,000 tonnes. This revision, the third in 12 months, underscores how fast the outlook shifts. In October 2025 ICSG called a 150kt deficit; by April 2026 it was a 96kt surplus, driven by weaker-than-expected Chinese demand growth (+1.9% vs earlier +2.4%) and stronger secondary scrap output. Mine production is now expected to grow just 1.4% in 2026, with refined output expanding only 0.9%. The surplus is paper-thin: at 0.096 million tonnes on a 28.7 million tonne market, it represents roughly one day of global consumption. Any single major disruption — a Grasberg outage, a Chilean strike, a logistics shock — could erase it entirely.
Goldman Sachs’s April 2026 note maintained its $12,650/t average copper price forecast for the year alongside a substantially larger surplus estimate of 490,000 tonnes. The bank’s analysis turns on the view that copper’s fair value is about $11,500/t, and that prices above $13,000/t are driven by tariff speculation rather than physical tightness. Goldman warns of potential sulphuric acid shortages if Hormuz disruption resumes, which could curtail 200,000 tonnes of Chilean refined output (roughly 1% of global supply), offset by 140,000 tonnes of demand destruction from slower global growth. It is a knife-edge call: the bank sees downside risk if tariffs are delayed past mid-2026, but also acknowledges that structural demand from grids, AI data centers, and EVs keeps a floor under $10,000/t.
On the other side of the analyst divide, S&P Global Market Intelligence forecasts LME copper averaging just above $12,100/t in 2026, citing a concentrate market that will stay tight for years with a cumulative deficit of 3 million tonnes projected by 2036. JPMorgan’s framework sees LME copper around $12,075/t average in 2026, with a Q2 peak near $12,500/t, anchored to mine disruptions and energy-transition demand. StoneX forecasts a $11,490/t average. These institutional views share a common thread: while 2026 balances may be near-equilibrium or modest surplus, the medium-term outlook is structurally under-supplied, and that long-dated narrative is keeping nearby prices elevated despite surplus headlines.
The Straits of Hormuz reopening in late June, following the US-Iran framework deal, removed one of the most acute supply-risk premia from the copper market. Shipping disruptions had raised costs for concentrates moving from the Middle East and added roughly $50-100/t to logistics for copper moving through Gulf routes. The reopening also eased energy input costs. Combined with rising Chinese smelter production and the return of some previously-idled scrap processing, the supply picture has improved at the margin — enough to pull LME copper $2,000/t below its January peak of roughly $15,000/t in some prints.
But mine-side fragility persists. Codelco posted its lowest monthly production in 20 years in August 2025 and has not recovered to pre-decline levels. Kamoa-Kakula in the Democratic Republic of Congo is expected to remove approximately 300,000 tonnes of supply across 2025-26 due to operational issues. Freeport-McMoRan’s Grasberg mine in Indonesia continues to face disruptions. The cumulative impact: despite a global surplus on paper, the physical concentrate market remains tight, with treatment and refining charges (TC/RCs) near zero for some smelters — a classic signal that mines are not delivering enough concentrate to smelters.
The China demand picture is nuanced. Real copper consumption spiked well above five-year ranges in early 2025 as buyers front-loaded purchases ahead of tariffs, then moderated sharply. Goldman Sachs estimates Chinese refined copper demand fell about 8% year-on-year in Q4 2025 as stimulus effects faded. ICSG now forecasts Chinese refined demand growing just 1.9% in 2026, a subdued pace for a country that accounts for roughly 58% of global copper use. Yet Beijing’s $300 billion-plus grid investment program and EV manufacturing targets provide stubborn support. The tension is between a weak property sector dragging on construction-grade copper and a strong electrification push lifting wire and cable demand. Neither force is winning decisively.
The US Section 232 tariff timeline looms as the single largest binary catalyst. The Commerce Secretary is due to deliver an updated copper market report to the President by June 2026, with a proposed 15% tariff on refined copper slated for implementation in 2027. Any acceleration of that timeline, or expansion of tariff coverage to downstream copper-intensive products, could reignite the CME-LME arbitrage and pull copper back above $14,000/t. Conversely, a delay or softening of tariff rhetoric would remove the primary driver of US stockpiling and could trigger destocking that pushes COMEX copper sharply lower and floods global markets with US-held metal. Goldman Sachs describes this as “the release valve”: once tariff uncertainty passes, the large global surplus becomes the dominant price driver.
For the physical market outside the US, regional tightness persists. LME inventories at 166,600 tonnes cover roughly 2.5 days of global consumption. European physical premiums remain elevated as CBAM compliance costs layer onto energy-intensive metal. Chinese import premiums have turned negative, signaling that domestic supply is ample and buyers are unwilling to pay up for foreign metal — a classic indicator that demand is soft at current prices. This divergence between high absolute LME prices and weak downstream signals in China is exactly the pattern that preceded the 2024 copper correction.
Copper procurement for H2 2026 demands a two-pronged strategy. First, do not bet on a single direction: the analyst range of $10,000–$13,000/t for 2026 is historically wide, and both a correction to $10,000 and a spike to $14,000 are credible. Second, geography matters more than headline balance. Non-US buyers face tight LME stocks and elevated physical premiums; consider term contracts with diversified delivery points and negotiate caps or collars rather than fixed-price deals in backwardation. US buyers sit on a cushion of record COMEX inventories but face tariff escalation risk that could raise landed costs by 15% or more. Stagger hedging across Q3 and Q4 at $11,000–$13,000/t, with trigger points linked to the Commerce Department’s tariff report (due Q3) and Chinese PMI data. For 2027 contracting, the tariff decision is binary: if tariffs proceed, US all-in costs jump; if delayed, a global surplus of 300–500kt will pressure LME toward $10,000/t. Build both scenarios into your budget contingency.