Copper prices are close to record highs, but this rise is not because factories or construction activity have suddenly increased a lot. Instead, prices are being pushed up mainly by supply problems and fears of new US tariffs.
US tariffs
As reported by Bloomberg, Copper futures in London jumped about 3%, coming close to the recent peak of just under $13,000 a ton. A key reason is concern that the US may impose import tariffs on copper. To avoid paying higher duties later, traders are rushing to ship copper into the US now. This has disrupted normal global trade flows. As more copper moves into the US, supplies in other parts of the world are getting tighter.
Importantly, much of this copper is not being used by industries right away. It is being stored and stockpiled. This means the shortage is not real demand-driven scarcity, but one created by trade and policy fears. This tightness is also visible in futures markets. In London, spot copper is priced higher than contracts for delivery in three months.
Global uncertainties and gold, silver prices
Copper prices also moved higher as global uncertainty increased and precious metals rallied. On January 5, 2026, copper traded at $5.81 per pound, up 2.84% from the previous day.
At the same time, gold rose to $4,427 per troy ounce, up 2.19%, while silver jumped 4.20% to $75.67 per troy ounce. This shows that investors are turning to commodities as a safe place to park money during uncertain times.
Geopolitical tensions are adding to this trend. Ongoing US-China tensions, the war in Ukraine, conflicts in the Middle East, and possible instability in Venezuela have all increased nervousness in global markets. A US–Venezuela crisis helped push gold prices higher, which in turn lifted interest in commodities overall, including copper.
As global trade becomes more divided and governments focus more on security and trade controls, investors expect markets to remain volatile. This uncertain environment has supported copper prices along with gold and silver, even though copper’s rise is still mainly driven by supply problems and tariff-related trade disruptions.
Supply disruptions
While tariffs are changing how copper moves around the world, problems at mines are adding to supply worries. As per Bloomberg, a strike at the Mantoverde mine in Chile has raised fresh concerns about production, at a time when global demand is still growing. Disruptions at mines in Indonesia, Congo and Chile have also increased fears that copper supplies could remain tight for longer.
In Indonesia, operations at the world’s second-largest copper mine, Grasberg, were suspended last month after mud flows flooded the site, killing seven workers. More broadly, declining ore quality, operational challenges and years of low investment mean miners are not in a position to quickly increase output. This is happening just as long-term demand from power, construction and energy transition projects continues to rise.
Upswing in base metals
Copper’s rise is also happening alongside a broader rally in base metals. Asian stock markets hit record highs, driven by strong interest in technology shares, which improved overall market sentiment and lifted commodity prices. Aluminum climbed as much as 1.8% to $3,069 a ton, its highest level since April 2022, supported by tighter supplies and expectations of strong long-term demand. Iron ore prices also moved slightly higher. Zinc inventories on the London Metal Exchange have fallen sharply this year, although zinc prices themselves have stayed relatively stable.
Copper is often called “Doctor Copper” because it is seen as a guide to the health of the global economy. This time, however, the message from prices is misleading. The current rally is not being driven by a sharp rise in actual copper use. Instead, prices are being pushed up by supply constraints, trade disruptions caused by tariffs, and speculative trading.
According to Investing.com, “Overall supply shortfalls, coupled with regional dislocation caused by US tariffs, are propelling copper,” China Securities Co. analysts led by Wang Jiechao wrote in a note. The global copper market will see a shortage of more than 100,000 tons in 2026,” they said. Copper jumped 42% in 2025, which was its strongest annual gain since 2009.
If tariff threats ease and global trade flows return to normal, the extra copper that has been stockpiled, specially in the US could flow back into the market. If that happens, speculative traders may exit their positions at the same time, which could lead to a sharp fall in prices.
Analysts have raised their price forecasts for 2026 mainly due to repeated supply disruptions. “We expect copper to hold onto its recent gains and sustain these into 2026 and beyond. Recent developments now suggest the refined copper market will begin to tighten earlier than we previously forecast,” said Matthew Sherwood at EIU to Reuters.