Analysts from Macquarie, JPMorgan and Mercuria told an LME Week panel in London that copper's price near $14,500 a tonne reflects US tariff policy and tight supply, not booming demand. One called AI's boost to copper demand "overhyped".
At a glance
- About 1.6 million tonnes of copper, worth about $23 billion, now sits in the US, Macquarie estimates.
- Comex holds 69% of world exchange copper stocks while the US uses about 6% of the world's copper.
- About 200,000 tonnes of copper demand was lost to substitution in China this year, Mercuria said.
Background
LME Week is the London Metal Exchange's annual gathering of the metals industry. Comex is the main US metals futures exchange. In 2025 the US put a 50% tariff on semi-finished copper products and set out a possible duty on refined copper of 15% from 2027 and 30% from 2028, which has pulled large amounts of metal into US warehouses.
What the panel said
"We're not at current price levels in base metals because of demand conditions," Mercuria's Nicholas Snowdon told a Bloomberg panel during LME Week, Fastmarkets reported. He said copper sat near $14,500 a tonne because of US policy. LME three-month copper closed at $14,420.50 on October 20.
Macquarie's Alice Fox called the AI boom "overhyped" as a copper driver. JPMorgan's Gregory Shearer said data centres would not push copper into a million-tonne deficit. Snowdon was more positive, expecting AI to lift US copper demand significantly over the next three to five years.
Why US policy matters so much
Traders have shipped copper into the US ahead of a possible tariff on refined metal. Fox estimates about 1.6 million tonnes, worth about $23 billion, now sits there. Comex holds 69% of world exchange stocks, while the US uses about 6% of the world's copper, Fastmarkets analyst Andy Cole said.
Snowdon called the tariff threat "one of the greatest feats of policy support for a price in commodity market history". The US Commerce Department's updated report was due by June 30, but no refined-copper tariff had been announced by early October.
What it means for India
Demand tied to the economic cycle is weak. Shearer said Chinese construction demand for copper fell by double digits, while growth areas such as grid upgrades, solar, wind and battery storage kept overall demand resilient.
High prices are pushing users toward cheaper aluminium. A source at an Indian smelter told Fastmarkets that aluminium is already replacing copper in air conditioners, though copper cannot be replaced entirely. Copper traded at nearly five times the price of aluminium on October 20.
Our read
Outlook: neutral. The panel sees copper held up by US tariff risk rather than demand, so the next US policy decision could move prices sharply either way.
What to watch
- Any US decision on a refined-copper tariff, which Snowdon says could decide where the 1.6 million tonnes goes.
- Exchange stock levels in Shanghai, which ended September below 40,000 tonnes.
- Further switching from copper to aluminium in appliances and wiring.
For information only, not investment advice.
Copper price in India
metalscost.com India reference price as of 2026-11-07.
Detailed analysis
Timeline
- 2026-09-10: LME three-month copper hits an intraday record of $14,875 a tonne.
- 2026-10-20: LME three-month copper closes at $14,420.50 a tonne.
- 2027-01-01: Planned start of a 15% US duty on refined copper under a 2025 proclamation, if implemented.
Demand Drivers
Cyclical demand from construction and autos is weak, while grids, solar, wind and storage keep overall demand resilient.
Inventory Drivers
Comex holds 69% of world exchange stocks, while Shanghai holds 4% despite China using about 60% of the world's copper.
Trade Tariffs
The threat of a US refined-copper tariff has pulled about 1.6 million tonnes into the US, tightening supply elsewhere.
What could lift prices
- A phased US tariff of 15% then 30% would keep copper tight outside the US, Snowdon said.
- Shanghai exchange stocks ended September below 40,000 tonnes.
What could weigh on prices
- If the US drops the tariff, its 1.6 million tonne stockpile could flow back to the world market.
- High prices are already driving substitution toward aluminium.
Country impact
| Country | Impact | Reason |
|---|---|---|
| United States | High | Its tariff policy is holding about 1.6 million tonnes of copper in the country. |
| China | Medium | It uses about 60% of the world's copper but holds just 4% of exchange stocks. |
| India | Low | Appliance makers are switching some copper to aluminium as prices stay high. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Consumer Appliances | Negative | Air-conditioner makers face high copper costs and are turning to aluminium. |
| Metal Trading | Positive | Traders own most of the copper stockpiled in the US. |
Who gains, who loses
- Traders holding US copper: They own about 1.6 million tonnes priced high on tariff risk.
- Copper users outside the US: Metal pulled into US warehouses leaves the rest of the market tighter.
Other ways this could play out
- If the US confirms the 15% then 30% tariff, prices outside the US could keep climbing.
- If no tariff comes, US stocks could flow back out and weigh on prices.
Price risks
- A sudden US tariff announcement could move copper sharply in either direction.
- Weak cyclical demand in China and Europe could surface if policy support fades.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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