Copper Tops $12,000 as Mine Woes, Tariff Trade Tighten Supplies

Core Viewpoint - Copper prices have reached an all-time high above $12,000 a ton, driven by severe mine outages and trade disruptions linked to US tariffs, positioning the metal for its largest annual gain since 2009 [1]. Price Movement - Prices increased by as much as 1% to $12,044 a ton on the London Metal Exchange, marking a more than 33% rise this year [2]. - The anticipation of tariffs on copper has significantly influenced price increases, leading to a bidding war among manufacturers for limited supplies [2]. Global Trade Impact - Despite a rapid deterioration in copper usage in China, which consumes about half of the world's copper, prices have continued to rise due to extreme disruptions in global trade flows [3]. - There is an expectation that prices will continue to increase as traders ship larger volumes of copper to the US in anticipation of potential tariffs [3]. Supply Disruptions - Severe supply disruptions have occurred due to mine outages across the Americas, Africa, and Asia, raising concerns about a major market deficit that could further drive prices up [4]. - Deutsche Bank has projected a 3% drop in output from the world's largest miners this year, with potential further declines expected by 2026 [4]. Future Market Outlook - Analysts at Morgan Stanley predict that the global copper market will face its most significant deficit in over 20 years next year, with demand expected to exceed supply by approximately 600,000 tons [5]. - Supply risks have been a persistent concern in the copper industry, with bullish forecasts from banks and investors highlighting a surge in usage in sectors like electric vehicles and renewables [6]. - Citigroup has suggested that prices could reach $15,000 in a bullish scenario, driven by a weakening dollar and US interest rate cuts, which would enhance copper's attractiveness to investors [6].