Copper Breaks Above $6 as Supply Concerns Intensify

Copper futures surged above the $6 per pound mark on Tuesday, setting a fresh all-time high as markets priced in a tighter global supply outlook for 2026. Growing concerns that the Trump administration could introduce new tariffs on refined metals have added urgency to the rally. Traders fear such measures would divert shipments toward the US, leaving major trading hubs such as London and Shanghai facing tighter availability and declining inventories.

Structural Demand Drivers Fuel the Rally

Beyond policy risk, copper’s demand fundamentals remain firmly supportive. Consumption continues to accelerate due to large-scale power grid upgrades, expanding renewable energy capacity, and the rapid buildout of data centers, all of which are highly copper-intensive. These long-term structural drivers have reinforced the perception that copper demand is no longer purely cyclical, but increasingly anchored to the global energy transition and digital infrastructure expansion.

Monetary Policy and China Add Tailwinds

Monetary policy expectations have further amplified bullish sentiment. Markets are increasingly confident that the US Federal Reserve will deliver additional interest rate cuts this year, easing financial conditions and supporting risk-on positioning across commodity markets. In China, the world’s largest copper consumer, continued policy support and ample liquidity are underpinning longer-term demand expectations, reinforcing copper’s strategic importance in industrial and energy supply chains.

Copper rose to around $6 per pound on January 6, 2026, extending gains to more than 12% over the past month and roughly 45% on a year-on-year basis. With inventories tightening and demand drivers remaining intact, copper prices are increasingly being viewed through a structural, rather than short-term, lens.