International Copper Prices Continue to Hit New Highs

International copper prices continue to reach new highs. Market participants generally believe that the global supply shortage caused by the shutdown of major mines is the main reason for the price increase, but recently, there has been a growing awareness of the US factor. Interest rate cuts, the widespread adoption of artificial intelligence (AI), and the resurgence of Trump’s tariffs… some analysts believe that due to these three factors originating from the US, copper prices will continue to break historical highs in 2026.

The London Metal Exchange (LME) 3-month copper futures, an international benchmark, continued to rise. Copper, which hit its highest point in about 1 year and 5 months in late October, has continued to reach new highs, reaching $11,771 per ton on December 8th, a record high. Looking back, copper prices experienced a long period of stagnation against the backdrop of the COVID-19 pandemic, so market participants are surprised by the current surge.

Many opinions cite the landslide accident at the Grasberg mine in Indonesia, which has the world’s second-largest production capacity, in September as a major reason for the current rise. However, to explain the current surge, the shortage of ore alone seems insufficient. Some market observers believe that three factors originating from the United States have accelerated the inflow of funds into copper.

The first factor is the optimistic outlook for the US economy brought about by interest rate cuts. The Federal Open Market Committee (FOMC) meeting on December 10th decided to lower policy rates for the third consecutive time. Participants predicted a further rate cut in 2026. The support for the US economy from interest rate cuts is also related to copper, often referred to as “Dr. Copper,” which is known for its strong performance and is a leading indicator of global economic trends.

A report by Citigroup on December 5th predicted that copper prices would reach an average of $13,000 per ton between April and June 2026. In an optimistic scenario, it even predicted an average of $15,000, citing a soft landing for the US economy as a major reason.

The second factor is the US AI boom. AI, as one of the key themes in the stock market in 2025, has driven up the stock prices of major US technology and semiconductor stocks, a trend that has benefited related stocks worldwide.

“The Philadelphia Semiconductor Index (SOX), comprised of major semiconductor stocks, and copper prices appear to be correlated,” noted Naohiro Shinmura, co-representative of Market Risk Advisory, a Japanese market risk advisory firm.

Copper is indispensable for the expanding power supply to data centers driven by the increasing prevalence of AI. BHP Billiton of Australia predicts that by 2050, copper usage in data centers will increase sixfold, reaching approximately 3 million tons annually.

Many argue that, in the medium to long term, the demand for copper from AI remains uncertain compared to that from electric vehicles (EVs). Shinmura points out, “Speculators betting on AI are buying copper futures like they’re buying AI-related stocks.” Looking at the open interest (unsettled balance) of London Metal Exchange funds, net long positions (long positions minus short positions) have reached their highest level in about nine months.

The third factor is the renewed concern over Trump’s tariffs. In February, US President Trump announced tariffs on copper. US copper prices surged. However, by late July, it was discovered that copper ingots were not subject to tariffs, and US copper prices stabilized.

While shelving the policy, the US government hinted at future tariffs. The discussion focused on raising the copper ingot tariff to 15% starting in 2027, and to 30% by 2028. A survey of the copper ingot market was planned for the end of June 2026, with Trump making the final decision.

Hiroyuki Tajima, senior account manager at Toyota Tsusho Metals Japan, stated that as the decision deadline approaches, “the market has begun to reconsider future tariffs.”

On December 10th, copper futures (the most active contract) traded on the COMEX (New York Mercantile Exchange) were at $5.3535 per pound (approximately $11,800 per ton). The price difference with the three-month futures contract on the London Metal Exchange is currently around $250 per ton.

Amidst the emergency shipments of copper to the US in response to tariffs, copper inventories on the COMEX remain at a high level of approximately five times the beginning of the year. On the other hand, there remains a significant shortage of inventory outside the US. London Metal Exchange (LME) inventories stood at approximately 165,000 tons as of December 9th, a decrease of about 40% from the beginning of the year, with signs of tight supply and demand driving up prices in London.

In recent years, the Chinese economy, accounting for 60% of global consumption, has had the greatest impact on copper prices. However, due to factors such as the sluggish real estate market, China has not yet emerged from its downturn. Instead, the US is now dominating copper price trends. “Make Copper Great Again”—if the market continues to focus on the optimistic US “Dr. Copper,” copper prices are likely to rise further.