While refined Copper was initially exempted from levies last year—temporarily halting shipments—the announcement that tariffs could be revisited prompted a renewed rush to redirect material toward the US. As a result, domestic prices once again began trading at a premium, incentivising inflows. US Copper imports surged in December to their highest level since July according to Bloomberg, reflecting this renewed arbitrage.The prospect of U.S. tariffs on refined Copper seems to continue to distort global mark ...

Core Insights - Copper prices have reached historic highs, with LME copper recently exceeding $12,000 per metric ton, marking a 42% year-to-date increase driven by strong demand from AI and constrained supply [1][10] - The market is experiencing a structural shift, with analysts predicting a long-term "supercycle" for copper due to factors like electrification and digital infrastructure [2][7] - Investors are encouraged to consider diversified copper ETFs as a strategic investment for 2026, rather than focusing on individual mining companies [2][12] Copper Demand Drivers - The rapid expansion of AI data centers is significantly increasing copper demand, as copper is essential for high-capacity power lines and cooling systems [4][5] - Wood Mackenzie forecasts a 24% increase in global copper demand by 2035, with AI being a major growth catalyst [5][6] - The demand for copper is also driven by energy transition, grid modernization, and transport electrification, alongside national security and infrastructure initiatives [7] Supply Constraints - Meeting the rising demand will require an additional 8 million tons of new mine capacity and 3.5 million tons of scrap copper, creating opportunities for price increases amid supply shortages [8] - Disruptions at major mines and declining ore grades are expected to lead to a projected 330,000-ton deficit for copper by 2026 [8] Price Forecasts - J.P. Morgan projects LME copper to average $12,500 per ton in Q2 2026 and $12,075 for the full year, citing supply disruptions and AI-driven demand as key factors [9] - Goldman Sachs anticipates a near-term price pullback to an average of $10,710 in the first half of 2026, with a long-term forecast of $15,000 per ton by 2035 [10][11] Copper ETFs - Recommended copper ETFs include: - **Global X Copper Miners ETF (COPX)**: $4.56 billion in assets, up 95.3% YTD, NAV of $72.20 [12][13] - **iShares Copper and Metals Mining ETF (ICOP)**: $171 million in assets, up 79.8% YTD, NAV of $44.42 [14] - **Sprott Copper Miners ETF (COPP)**: $97.4 million in assets, up 71.7% YTD, NAV of $34.93 [15] - **United States Copper ETF (CPER)**: $460.7 million in assets, up 40.1% YTD, NAV of $35.44 [16]