The Copper Monthly Metals Index (MMI) appeared decidedly bullish, rising 11.68% from December to January.
Copper prices continued to roar during the first weeks of 2026, with both Comex and LME prices climbing to new all-time highs. By January 15, Comex and LME prices had risen over 40% from where they started 2025.
However, the narrative behind the unprecedented copper price levels remains nuanced. From inventories being siphoned out of China and into the U.S. to smelters curbing purchases amid record-high prices, the red metal’s market is undergoing one of the most turbulent phases in decades.
The unfolding story reflects not only short-term trading frictions and demand expectations, but also the strong emergence of speculative capital. Today, these factors have dramatically reshaped global supply and demand dynamics.
The transition to electrification underpins expectations for significant future consumption growth. This comes as renewable energy infrastructure, electric vehicles and data centers are all heavily reliant on copper due to its excellent conductivity. Forecasts suggest that annual demand from these sectors will grow substantially over the next decade as these new industries scale. Grid expansion and reinforcement alone are expected to absorb meaningful volumes of copper as aging transmission networks are upgraded to handle intermittent renewable power and rising electricity loads. Together, these trends point to sustained, non-discretionary copper consumption rather than short-lived cyclical strength.
Raw material concerns continue to plague the U.S. copper market and have only been exacerbated by disruptions in global mine supply, declining ore grades, and limited investment in new large-scale projects. Years of underinvestment, permitting delays, and rising capital costs have constrained the pipeline of future supply, leaving little buffer to respond to demand shocks. In key producing regions, labor disputes, water shortages, and political uncertainty have added to operational risk, while existing mines face natural depletion. As a result, supply growth is struggling to keep pace with demand expectations, increasing the probability of tighter balances and price volatility over the medium- to long-term.
Markets continue to bet that U.S. trade policy, particularly the threat of expanded tariffs on copper imports, will support higher domestic copper prices by tightening local availability and reshaping trade flows. As buying activity elevates U.S. prices and premiums, international costs are forced to climb in order to compete for material. This policy-driven friction adds an additional layer of support to U.S. pricing, even if global fundamentals are only moderately tight. It also reinforces the perception that copper supply security has become a strategic concern rather than purely a market-driven one.
Capital chasing commodity assets for inflation hedging or fear of supply constraints has further strengthened the bull case for copper. As investors seek protection against persistent cost pressures, fiscal spending and geopolitical risk, copper’s role as both an industrial necessity and a proxy for global growth has become more prominent. Financial inflows can amplify underlying physical tightness, pushing prices higher during periods of strong sentiment. This dynamic suggests that copper prices may remain elevated or volatile due to both fundamentals and sustained investor interest in hard assets as a hedge against macroeconomic uncertainty.
As of mid-January, technical signals remain bullish. Prices have repeatedly broken above short-term resistance levels, suggesting that the current uptrend is not only intact but robust. Momentum indicators continue to point higher, reinforcing confidence among trend-following investors. Such stakeholders have poured significant capital into the market, accelerating price moves on relatively modest shifts in fundamentals. By the start of 2026, long bets among investment funds on the LME stood at their highest level in several years, underscoring the strength of the speculative conviction. These positioning dynamics have provided significant momentum to the current trend, increasing the likelihood that rallies will be extended and pullbacks will remain shallow as long as technical support levels hold.
The copper market’s current condition highlights a perplexing dichotomy. On the one hand, long-term fundamental demand drivers remain strong while current technical signals appear bullish. On the other hand, the present rally appears to be amplified by factors that may be only tangentially related to end-use demand. Meanwhile, current demand conditions remain in question.
U.S. tariff threats have prompted stockpiling across the U.S., draining inventories elsewhere. However, neither tariff fears nor inventory distortions amounts to real industrial demand. This is leaving an accumulating supply glut in the U.S., which markets will eventually be forced to contend with. As stockpiling pushes Comex prices, the drawdown of LME stocks appears to be the primary driver of LME prices, which have been forced higher to compete for material. Should Comex prices slow, other exchanges are likely to follow suit.
The copper market’s current condition highlights a perplexing dichotomy. On the one hand, long-term fundamental demand drivers remain strong while current technical signals appear bullish. On the other hand, the present rally appears to be amplified by factors that may be only tangentially related to end-use demand. Meanwhile, current demand conditions remain in question.
U.S. tariff threats have prompted stockpiling across the U.S., draining inventories elsewhere. However, neither tariff fears nor inventory distortions amounts to real industrial demand. This is leaving an accumulating supply glut in the U.S., which markets will eventually be forced to contend with. As stockpiling pushes Comex prices, the drawdown of LME stocks appears to be the primary driver of LME prices, which have been forced higher to compete for material. Should Comex prices slow, other exchanges are likely to follow suit.
While prices surge, demand from China appears increasingly absent. According to reporting from Bloomberg, a significant portion of Chinese industrial demand has effectively evaporated as buyers recoil from record-high prices. Simultaneously, purchases from mills and factories have contracted sharply, reflecting a direct feedback loop where higher prices curtail consumption, particularly among cost-sensitive industrial users.
Independent data corroborate this trend. For instance, China’s 2025 copper imports are projected to be the lowest since 2020, falling around 6% year over year due to high prices suppressing foreign buying. Other metrics, such as slumping premiums for imported copper and slowing downstream processing activity, suggest demand has softened significantly.
While high prices may be partially responsible for Chinese demand destruction, the health of key end-use sectors also remains in question. Indeed, consumer demand appeared weak throughout 2025. Meanwhile, the country’s property sector, once a leading contributor to copper demand, shows no signs of rebounding. For global copper prices, it remains unclear whether the current trends can continue without the momentum from Chinese demand.
For now, the market bias remains decidedly bullish. However, this call comes with a sharp warning that the surge may be driven more by a “circular melt-up” of prices and trading dynamics rather than a pure reflection of physical supply and demand balances.
Ongoing headwinds pose a significant volatility threat in the months ahead. While speculative and arbitrage behavior have helped drive prices higher, the momentum from these factors may not last forever, particularly if the U.S. clarifies its intent regarding additional copper tariffs.
Meanwhile, China’s purchasing pullback serves as a cautionary tale about the limits of demand at elevated prices. When the largest buyer hesitates, global demand can shift quickly.