Copper prices surged to a fresh all-time high this week, with the COMEX September contract touching $6.7045 per pound on Tuesday before trading near $6.72 on Wednesday. The metal has now gained roughly 17% year-to-date in 2026 and more than 50% over the past 12 months, driven by a convergence of US trade policy uncertainty and a deepening physical supply squeeze on global markets. On the London Metal Exchange, copper touched $14,050 per tonne this week, approaching January's record of $14,500.
The LME cash contract is commanding a premium of more than $100 over three-month metal, marking the widest backwardation since January and signalling that physical buyers are paying a significant premium for immediate delivery. The US buying surge is being fuelled by tariff front-running. More than 200,000 tonnes of copper arrived at US ports in July, the largest monthly inflow since records began in 2014, according to Bloomberg calculations based on customs data.
Traders continue to ship metal into the United States ahead of a final White House ruling on refined copper import tariffs, a decision that has remained pending since Commerce Secretary Howard Lutnick's June 30 deadline passed without a resolution. The proposal currently on the table would impose a 15% tariff starting in January 2027, rising to 30% a year later. The waiting game has made stockpiling profitable.
New York copper traded approximately $640 per tonne above London on Tuesday, nearly double July's average premium of $350. Combined COMEX and LME inventories now exceed 740,000 tonnes, while US ports hold an additional 110,860 tonnes in private storage. Michael Cuoco, head of metals at StoneX Financial, cautioned that the extraordinary inflows reflect policy arbitrage rather than underlying consumption growth.
"The tariff arbitrage is ruling the roost over demand growth," Cuoco stated. Analysts note that a similar ruling in July 2025, when a 50% tariff spared refined metal, caused COMEX prices to collapse 20% in a single session. A comparable exemption now would hit the US premium sharply.
Beyond the tariff dynamic, a structural supply shock is tightening the market outside the United States. The Strait of Hormuz closure in late February disrupted approximately half of seaborne sulphur exports from the Gulf, according to Kpler research. China subsequently banned acid exports in April, and the combined effect of these two shocks has removed roughly a quarter of global sulphuric acid supply.
This matters critically because solvent extraction and electrowinning, known as SX-EW technology, accounts for more than 15% of the world's copper cathode production and depends heavily on sulphuric acid. Operations in Chile and the Democratic Republic of Congo are reported to hold only 30 to 60 days of acid inventory, raising concerns about near-term production disruptions. Chile delivered a further blow to supply expectations when state miner Codelco paused the expansion of its El Teniente mine after detecting new seismic risks, coming one year after a deadly rock burst at the site.
Major financial institutions have revised their price outlooks sharply upward in response. Goldman Sachs lifted its end-2026 copper price target to $13,735 per tonne, while Citi sees prices reaching $15,000 per tonne within a year. Analysts note that unlike the copper rally that faded within days of setting a previous record in June, the current backwardation structure suggests that the tightness is physical in nature rather than speculative.
From a technical analysis perspective, as reported by Jakub Dziadkowiec at BeInCrypto, the daily chart shows copper breaking out of the $6.60 resistance zone that capped every rally in May and June. Key support is identified near $6.00, a level that acted as resistance from January through May 2026 before becoming a floor. Buyers have defended the underlying exponential uptrend three times: at the March 20 low of $5.34, near $6.00 in early July, and around $6.25 in late July, each test arriving at a progressively higher level.
An ascending trendline connecting the January, May, and June peaks projects the next upside target at $6.85 per pound, approximately 2% above current spot levels. The trendline and the exponential support curve are set to converge near that level in September, establishing a critical technical decision point. The daily Relative Strength Index has entered overbought territory near 70, a condition last seen in December 2025 and May 2026, both of which preceded consolidation rather than reversal and were interpreted as signs of trend strength.
A close below $6.60 would delay the bullish technical setup, while a breach of $6.00 would invalidate it. Market participants are now watching whether genuine physical scarcity can sustain the rally beyond the artificial, tariff-driven demand that has defined much of the recent move.
Source: finance.yahoo.com