London Metal Exchange (LME) official copper prices surged past $13,000/t to reach a new record high today, as financial investors scrambled for safe-haven products in the aftermath of US military action in Venezuela. The latest buying poured fuel on an existing bull run in prices driven by concerns over tight global availability of refined metal owing to a renewed rise in shipments to the US.
The three-month copper price closed at $13,230/t in the official morning session today, up by 3.04pc on the day and by 5.8pc since 2 January, the last session before the capture of Venezuelan president Nicolas Maduro by US forces over the weekend.
Copper prices were supported throughout 2025 by financial investors seeking alternatives to silver and gold in their flight to safe-haven assets because of heightened geopolitical uncertainty. The mini-spike in copper prices since 2 January is in line with similar movements in alternative safe-haven products, such as platinum group metals.
Copper prices began to rise sharply at the tail end of last year, increasing by 13.9pc over 28 November-2 January. Prices were supported by central bank interest rate cuts and a renewed uptick in shipments to the US owing to speculation that the US administration under President Donald Trump would revisit its plans to impose tariffs on refined copper imports.
Expectation that Trump would implement tariffs of 25-50pc drove a huge surge of shipments to the US in the first seven months of 2025, as trading firms sought to build up stockpiles of tariff-free copper. The pace of shipments slowed after the US decided in late July not to impose tariffs on copper cathode, but the arbitrage between copper contracts on the US Comex exchange and the LME did not drop off sufficiently to completely reverse the change in global trade flow towards the US.
Speculation that Trump may decide to put tariffs on copper this year returned in the fourth quarter, causing US imports of refined copper to increase again. US trade data is lagging because of the country's government shutdown in October-November, but data from vessel-tracking service Kpler indicate refined copper shipments in December surged to their highest level since July. Volumes tracked by Kpler for December are on par with those recorded in May 2025, when the US imported 220,000t. Copper stored in Comex warehouses rose to 503,373t on 5 January, up by 95pc from the end of July.
LME on-warrant warehouse stocks of copper recovered briefly in August-November following the US' tariff reprieve, but stocks have fallen again, reaching 114,200t on 6 January, down by 27pc from 2 December. And critically, the LME recovery was slightly misleading in terms of diversity of supply, as 95pc of on-warrant stocks held by the LME at the end of November were from China and Russia, which are not deliverable to Comex, the most recent LME country-of-origin data show. This Chinese-Russian share of LME on-warrant stocks is up from 73pc in November 2024, highlighting the extent to which the global backstop inventory of copper from other origins has evaporated.
Copper supply concerns are not only being driven by the renewed flow of metal to the US. The latest uplift in prices was arguably sparked more directly by a 1 December announcement that Chinese copper smelters — which account for about 11mn t/yr of primary capacity — plan to cut their utilisation rates by at least 10pc this year, in response to negative copper concentrate treatment and refining charges (TC/RCs).
And further signals have emerged that supply of copper concentrate to smelters will continue to be a major risk factor in the near term, most notably with the benchmark annual TC/RC settlement between major Chinese smelter Jiangxi Copper and Chilean mining firm Antofagasta concluding at $0/t and 0.0¢/lb, respectively, down from $21.25/t and 2.125¢/lb in 2025. The decrease reflects expectations among markets participants of a 650,000–850,000t copper concentrate supply shortfall in 2026.
Tight supply of refined metal and concentrate and the attention of financial investors on the copper market will remain the key support struts for copper prices going forward. Physical consumer demand has not been a major driver of the recent price surge. The two lauded drivers of copper demand — energy transition applications and data centres serving the artificial intelligence boom — are expected to fully kick in through the latter years of this decade. But it appears likely that the longer-term bull case for copper demand is feeding back into positive price sentiment whenever short-term issues intensify on the supply side, which may see the floor for any downward correction tick upwards through each new spike.
