Copper’s Tight Supply and Tariff Risks Set for a Volatile 2026

Copper Market Outlook for 2026: Tight Supply, Tariff Risks, and Volatility Ahead

Copper‘s remarkable performance in 2025, marked by a nearly 40% price surge, set the stage for a tight but fragile market heading into 2026. Analysts predict that the copper market will face significant volatility as supply strains deepen, tariff risks loom, and demand for key industries such as electric vehicles (EVs) and energy transition materials stays strong.

The 2025 Surge: A Year of Unprecedented Price Gains

In 2025, copper prices reached a record-breaking $11,800 per tonne, the highest level ever seen. Traders rushed to bring copper into the US, fearing potential tariffs under the Trump administration, which could impose levies as high as 15%. This resulted in an estimated 730,000 to 830,000 tonnes of copper becoming “economically trapped” in US warehouses. According to Benchmark Minerals analyst Albert Mackenzie, this trapped copper—stockpiled and unable to leave US warehouses—contributed to tightening global supply and pushed premiums higher.

However, Mackenzie notes that the surge in copper prices may not fully reflect actual market conditions. While mining companies push the narrative of an impending supply deficit, the market remains more complex. Despite the high prices, physical supply tightness is uneven, and much of the copper in US warehouses remains unused, preventing price pullbacks.

Supply Strains and Tariff Fears: What to Expect in 2026

Looking ahead to 2026, the copper market faces several challenges. Mining disruptions in major copper-producing countries like Indonesia, the Democratic Republic of Congo (DRC), and Chile continue to cause delays in output. Key sites such as Grasberg and Kamoa-Kakula are expected to affect production levels for years. Additionally, declining ore grades at several mines limit the amount of copper smelters can process, tightening concentrate availability.

While copper demand remains strong on paper, driven by the rising adoption of electric vehicles, grid upgrades, and broader energy transition efforts, actual consumption has underperformed, particularly in China, where construction and manufacturing have lagged. High copper prices have also led some buyers to consider alternatives like aluminum, adding further uncertainty to the market.

The risk of new tariffs or policy shifts, especially from the US, could add more volatility to copper prices in 2026. Analysts warn that changes in trade relations could cause significant fluctuations in demand and supply, particularly if large amounts of copper stay trapped in US warehouses. As a result, copper prices could swing suddenly, driven by news of tariffs, economic stimulus, or trade deals.

SuperMetalPrice Commentary:

As we approach 2026, copper’s market will balance short-term uncertainties and long-term structural challenges. While tariffs and macroeconomic conditions will cause volatility, the overall trend shows tightening supply and increasing demand. Mining companies, governments, and traders must navigate these challenges carefully to avoid exacerbating price swings. Long-term investors should stay alert to potential copper shortages but also remain cautious of near-term risks such as policy changes and disruptions. Copper’s critical role in the energy transition will remain a key driver of its value.