Benzinga·2025-12-06 16:16Core Viewpoint - Copper prices have surged, with benchmark futures exceeding $11,700 a ton, marking the strongest rally since last summer, driven by expectations of phased copper tariffs starting in 2027 [1] Supply Dynamics - Tightening supply and dislocated inventories are contributing factors, with traders front-loading shipments to the US to take advantage of higher domestic prices and hedge against future import levies, leading to increased price volatility [2] Market Predictions - Citigroup projects a target price of $13,000 a ton by Q2 2026, citing a structural deficit due to a mismatch between new supply and rising demand from sectors like grid upgrades and energy transition [3][4] - JP Morgan aligns with a bullish outlook, forecasting a refined copper deficit of approximately 330,000 tons in 2026 and prices reaching around $12,500 a ton in Q2 2026, averaging just over $12,000 for the entire year [5] Contrarian Views - Goldman Sachs presents a contrasting perspective, arguing that current price levels exceed fundamentals and that sufficient metal is available to meet demand [5][6] Inventory Movements - Mercuria has withdrawn about $500 million worth of copper from LME warehouses, significantly tightening available exchange stocks, with recent inventory cancellations being among the largest in over a decade [7] - The situation has led to a paradox where headline stocks are rising while deliverable metal outside the US is decreasing, highlighting a critical feature of the current market cycle [7] Future Concerns - Mercuria's Global Head of Metals & Minerals warns of potential critical shortages of copper cathodes outside the US as early as Q1, emphasizing the likelihood of tightness and higher prices if current trends continue [8][9]