Copper market is facing a crisis! Institutions predict it may reach $13,000 per ton by 2026

On December 1st, the London Metal Exchange (LME) copper prices surged past the historic high of $11,292 per ton, with an increase of 29% since the beginning of the year. Faced with tight global supply and rising expectations of Fed rate cuts, major investment institutions are raising their annual copper price targets.

Supply Crisis Emerges, Multiple Factors Drive Copper Prices Higher

The current copper market is facing a crisis primarily due to frequent disruptions in global mine production, leading to sustained supply pressure. At the same time, due to tariff expectations, international traders are shipping large quantities of copper to the higher-priced US market, causing severe depletion risks in inventories in other regions and further intensifying global supply tightness.

Industry Pricing Power Adjusts, Premiums Surge Significantly

Chile’s national copper producer, Codelco, recently informed clients that the annual 2026 contract supply premium will be $350 per ton higher than the LME benchmark price. This premium, compared to the $89 agreed upon in 2025, has more than tripled, fully reflecting market expectations of tight copper supply.

The COMEX copper prices also show a relative premium over the LME. Robin Martin, Head of Market Development at the London Metal Exchange, pointed out that the current 2% to 3% premium on COMEX is likely to evolve into a structural feature of the market and continue over the next 18 months. Arbitrage trading within the US is becoming profitable as a result. Kostas Bintas, Head of Metals at Mercuria Energy Group, stated that this will present excellent investment opportunities for copper bulls, with US copper imports expected to increase significantly in the coming months.

Multiple Institutions Bullish, Year-End Targets Break Records

Cochilco, the Chilean Copper Commission, has raised its average price forecast for copper in 2026 to $4.55 per pound (approximately $10,030 per ton), setting a new historical high.

UBS Group has issued an even more aggressive outlook. The bank predicts copper prices will rise in stages, reaching $11,500 per ton in March, $12,000 in June, $12,500 in September, and setting a target of $13,000 per ton for December.

Supply Deficit Widens, Tight Supply Situation May Persist

UBS also revised its supply gap forecast upward, expecting a copper market deficit of 230,000 tons in 2025, nearly doubling to 407,000 tons in 2026. The bank emphasized that declining inventories and multiple supply risks suggest that the tight copper market could continue to ferment over a longer period.