Copper started 2026 right where it dropped off, rallying above $13,000 a ton on the London Metal Exchange (LME). Equities rallied with Southern Copper Corporation (NYSE:SCCO) closing 3.83% higher at $154.39, while Freeport-McMoRan, Inc. (NYSE:FCX) gained 4.78%, ending Monday at $54.41.
The red metal gained more than 43% in 2025. It was the best performance since 2009, as supply concerns and trade-related dislocations tightened availability across global markets.
Persistent disruptions have recently plagued key global operations. Issues at Grasberg in Indonesia and Kamoa-Kakula in the Democratic Republic of Congo eroded what little buffer supply side had. Those concerns carried into the new year and were amplified by a strike at Chile's Mantoverde mine, which helped reignite speculative interest. Beyond individual disruptions, analysts point to deeper structural issues.
"Years of underinvestment and ongoing mine disruptions have left the market with little buffer, while tariff policy uncertainty and stockpiling are intensifying the squeeze on available metal," Ewa Manthey, commodities strategist at ING, said, according to the miningmx. She noted that supply growth has struggled to keep pace with demand from electrification, data centers, and the energy transition.
Short-Term Skepticism
Despite the bullish start to the year, a multinational research firm, BMI, has maintained its 2026 average copper price forecast at $11,000 per ton. According to MiningWeekly, the firm argues that while tightening supply and positive sentiment linked to net-zero sectors will continue to support prices, several macroeconomic factors are likely to cap upside potential.
BMI points to the US dollar index in particular, which it expects to trade broadly between 95 and 100.
"A move to slightly stronger levels is not ruled out, particularly if the US economy outperforms, which, in turn, will cap the upside potential for copper prices," the company said.
BMI is also cautious on the demand outlook. While electric vehicles and renewable energy are expected to anchor consumption, the firm forecasts a slowdown in Chinese growth in 2026. They expect the real GDP expansion to ease from 5% in 2025 to about 4.5%. Ongoing weakness in China's property sector remains a headwind, limiting the pace at which demand can accelerate.
Still, while the short-term outlook is subdued, BMI acknowledges that, in the long run, a deficit will occur.
The company projects copper prices reaching $17,000/t by 2034 as structural deficits persist. Rapid growth in electrification, renewable power, and electric vehicles is expected to outstrip new supply additions. Thus, the trend reinforces copper's role as a critical element in the energy transition.
Price Action: Northisle Copper and Gold Inc. (OTC:NTCPF), a junior miner from Benzinga's 2026 watchlist, closed 12.59% higher at $2.150.
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