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| Copper price |
Analysts lifted global copper price forecasts for 2026 despite persistent tariff uncertainties. Speculators accumulated between 1.5 million and 2 million tonnes of copper inside United States warehouses. This massive inventory buildup followed earlier Section 232 trade investigations and tariff expectations. However, the International Copper Study Group (ICSG) increased its 2026 global refined copper surplus projection to 104,000 tonnes and its 2027 surplus projection to 368,000 tonnes. Major institutions like Macquarie warn that a formal US tariff rejection could trigger a sharp price collapse.
Inventory Disconnect Sparks Market Volatility
Market participants face severe disconnects between physical inventory location and actual global demand. The COMEX-LME price spread narrowed significantly, eliminating previous arbitrage profit opportunities. Meanwhile, potential US trade policy changes threaten to alter international scrap flows overnight. Proposed US trade decisions might incorporate an immediate ban on scrap copper exports. Such export restrictions would instantly remove 600,000 tonnes of contained metal annually from non-US smelters.
China Demand Dominates Secondary Smelting Outlook
China consumed 58.9% of total global refined copper last year. Consequently, Chinese smelting capacity dictates worldwide scrap metal demand and raw material premiums. Global smelters face ongoing copper concentrate shortages, raising secondary scrap consumption. Mining companies like Antofagasta lowered future production targets while cash costs rose. Therefore, secondary recyclers hold critical leverage in balancing near-term global supply deficits.
ScrapInsight Commentary
The divergence between massive US warehouse stockpiles and tight ex-US cathode availability highlights deep geopolitical distortions in physical metal flows. If Washington explicitly waives refined copper import tariffs, liquidation of US-held inventories will likely trigger severe downward price corrections on COMEX and LME exchanges. Conversely, any accompanying US scrap export ban would instantly squeeze Asian secondary smelters, driving secondary copper scrap discounts to historic lows.
