What's Happening?
BMI, a Fitch Solutions company, has upheld its 2026 average yearly copper price forecast at $11,000 per ton. This decision is driven by a tightening supply and positive demand sentiment from sectors linked to the transition to net zero, despite sluggish demand from China's property sector. The forecast reflects the impact of prolonged supply shocks and tariff-related developments that have influenced copper prices since September 2025. The U.S. Federal Reserve's rate cut and ongoing supply-side constraints are contributing to a bullish outlook for copper, with prices reaching a record high of over $12,000 per ton in December 2025. The U.S. dollar index remains stable, and easing monetary policy is expected to support copper prices, although
tariff pressures may introduce volatility.
Why It's Important?
The sustained high copper prices have significant implications for industries reliant on the metal, particularly those involved in the green energy transition. Copper is essential for electric vehicles and renewable energy infrastructure, making its price a critical factor in the cost and feasibility of these technologies. The U.S. economy's performance and potential tariff implementations could further influence copper prices, affecting both domestic and international markets. The ongoing supply constraints and tariff uncertainties highlight the fragility of the copper market, with potential impacts on global trade and economic stability.
What's Next?
The U.S. Secretary of Commerce is expected to provide an update on the domestic copper market by June 30, which could lead to new tariffs on refined copper. This decision will be crucial in determining future price movements and market dynamics. Additionally, the potential for further supply disruptions and the outcome of U.S.-China trade relations will be key factors to watch. The copper market is likely to remain sensitive to these developments, with significant implications for stakeholders across the supply chain.
