The red metal copper has carried forward its strong momentum from 2025 into the opening days of 2026, rallying to levels exceeding $13,000 per ton on the London Metal Exchange (LME). This robust start to the new year has been mirrored in the equity markets, with prominent miners experiencing notable gains. Southern Copper Corporation (NYSE:SCCO) saw its stock close 3.83% higher at $154.39, while Freeport-McMoRan, Inc. (NYSE:FCX)'s shares rose 4.78%, ending the session at $54.41.
Throughout 2025, copper prices posted an impressive increase of over 43%, marking the best performance since 2009. This surge in value has been attributed primarily to heightened concerns about supply constraints and trade disruptions that have tightened availability across global markets. Key mining operations have encountered persistent difficulties in recent times. Notably, production challenges at Grasberg in Indonesia and Kamoa-Kakula in the Democratic Republic of Congo have diminished the already limited supply buffers. The start of 2026 has seen these worries intensify further, exacerbated by a strike at Chile's Mantoverde mine, which has rekindled speculative interest in copper.
Analysts suggest that the current supply issues extend beyond isolated operational disruptions and point to more fundamental structural imbalances. Ewa Manthey, a commodities strategist at ING, conveyed that years of underinvestment coupled with continuing mine disruptions have left the market with minimal surplus capacity. Adding to the strain, uncertainties surrounding tariff policies and tendencies toward stockpiling have compounded the tightness of available metal inventories. These dynamics are occurring at a time when demand is expanding rapidly, spurred by ongoing trends in electrification, data center expansion, and the broader energy transition.
Despite this optimistic beginning to the year, some market observers remain measured in their outlook. The multinational research firm BMI has upheld its forecast for the average copper price in 2026 at $11,000 per ton. According to MiningWeekly, BMI underscores that although the continued tightening of supplies and positive sentiment linked to net-zero technology sectors will provide ongoing support, certain macroeconomic headwinds are likely to constrain further price upside.
A critical factor identified by BMI is the trajectory of the US dollar index. The firm anticipates this index will generally trade between 95 and 100 throughout the year. A possible shift toward a slightly stronger dollar cannot be discounted, particularly in the event that the US economy performs better than expected. Such dollar strength typically acts as a ceiling on copper prices by making commodities priced in dollars more expensive for holders of other currencies.
On the demand side, while sectors such as electric vehicles and renewable energy installations are poised to underpin consumption, BMI projects a moderation in China's economic growth during 2026. Their forecasts indicate an easing of real GDP growth from an estimated 5% in 2025 to around 4.5% in 2026. Ongoing difficulties within China’s property market constitute a significant headwind, potentially limiting the acceleration of copper demand in the world's largest consumer of the metal.
Though the near-term outlook for copper prices appears tempered by these factors, BMI recognizes that in the longer term, fundamental market imbalances are expected to generate sizeable deficits. Their projections indicate that by 2034, copper prices could reach approximately $17,000 per ton. This forecast reflects the anticipation that underlying supply growth will remain insufficient to keep pace with the rapid expansion in demand driven by electrification, renewable energy development, and the proliferation of electric vehicles. Accordingly, copper's vital role as a component in the energy transition is reinforced by these structural market trends.
In the equities space, junior mining companies have also displayed significant price movements. Northisle Copper and Gold Inc. (OTC:NTCPF), highlighted as a company to watch in 2026, closed 12.59% higher at $2.15, signaling investor interest in emerging players within the sector.
Key Points:
- Copper prices have surged beyond $13,000 per ton in early 2026, fueled by ongoing supply disruptions and robust demand.
- Leading miners Southern Copper Corporation and Freeport-McMoRan reported share price gains of 3.83% and 4.78%, respectively.
- Analysts cite years of underinvestment and persistent mine challenges as underlying causes of tightened supply buffers.
- Despite early strength, research firms like BMI maintain conservative price forecasts due to macroeconomic pressures, including expected US dollar strength and China's slowing growth.
Risks and Uncertainties:
- Operational disruptions at major mines such as Grasberg, Kamoa-Kakula, and Mantoverde continue to affect supply availability.
- Potential appreciation of the US dollar may impede further copper price increases.
- Slowing economic growth in China, particularly within the property market, could dampen copper demand expansion.
- Trade policy uncertainties and stockpiling behaviors add complexity to market dynamics and pricing.