Core Viewpoint - The base metals sector, particularly copper, is experiencing significant price increases, with LME copper forwards and COMEX copper futures gaining over 41% in 2026, despite price volatility [1]. Price Performance - LME copper forwards closed 2025 at $12,423 per ton, while COMEX copper futures closed at $5.6820 per pound. By early February 2026, prices rose to over $12,900 per ton and above $5.80 per pound [2]. - LME copper three-month forwards reached a record high of $14,527.50 per metric ton in January 2026, marking a 16.9% increase from the 2025 closing price [3]. - COMEX copper futures hit a record high of $6.5830 per pound in late January 2026, which is 15.9% higher than the 2025 closing price [7]. - Despite recent price corrections, both LME and COMEX copper have maintained their bullish trends, with prices remaining above critical technical support levels [8]. Demand Drivers - Copper is recognized as a leading base metal essential for infrastructure construction. The demand for copper is being driven by technological advancements in green energy and AI infrastructure, which are increasing electrification requirements [9]. - Analysts from Goldman Sachs have referred to copper as "the new oil" due to the rising demand from green energy initiatives [9]. - In late 2025, JPMorgan analysts noted that copper's mine supply growth is essentially flat, contributing to its fundamental tightness, with prices already exceeding their 2026 forecast levels [10].

Core Viewpoint - Copper prices are expected to continue rising, supported by both technical and fundamental factors, with a potential base forming around $5 per pound for further increases in 2026 [1]. Price Trends - As of November 17, 2025, COMEX copper futures were trading at $5.016 per pound, while three-month LME forwards were at $10,852 per metric ton. By mid-December 2025, futures exceeded $5.40 per pound and LME forwards surpassed $11,590 per ton [2]. Impact of Tariffs - Tariffs introduced in 2025 led to increased volatility in copper prices. The "Liberation Day" tariff announcement in April 2025 caused significant market fluctuations, with COMEX copper futures reaching record highs while LME forwards lagged behind [3]. - The price differential between U.S. copper in COMEX warehouses and LME copper reached a historical high, with U.S. copper trading at a premium. COMEX stocks surged by 388% from 93,161 tons at the end of 2024 to 454,638 tons by December 8, 2025, while LME inventories fell by 38.6% from 271,400 tons to 166,600 tons in the same period [3]. Market Dynamics - U.S. tariffs caused distortions that led to record highs in COMEX copper futures in March and July 2025, at $5.3740 and $5.9585 per pound, respectively [4]. - The LME forwards eventually caught up with COMEX futures, reaching a new high of $11,952 per ton in December 2025, validating the bullish outlook for copper despite earlier price depressions [6].