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Copper's Longest Rally Since 1994 Collides With a Shrinking Supply Chain
By Michael Kern - Sep 07, 2026, 12:00 PM CDT
- Copper just logged its 10th straight weekly gain, the longest streak since 1994, with LME prices near the January record of $14,527.50 a ton.
- Global mine output fell 1.1% in the first half of 2026, with Codelco, Freeport and Chile all posting steep declines, putting the market on track for its first annual drop since 2017.
- The White House's call on refined copper tariffs is more than two months overdue, even as Congo's surprise export ban and record Comex inflows keep reshaping trade flows.
Copper is riding its longest weekly winning streak since 1994, and the physical market underneath the rally keeps getting thinner.
Benchmark prices on the London Metal Exchange notched a 10th straight weekly gain through last Friday, trading near $14,300 a ton and within reach of the record $14,527.50 set in January. On Comex, prices topped $6.70 a pound in August, a fresh all-time high. Behind the run sits inventory that keeps draining: LME warehouse stocks fell for 42 straight days through mid-August, the longest stretch since 2014, and nearly half of what's left is already earmarked for withdrawal.
Tuesday marks a year since the disaster that helped set this squeeze in motion. On Sept. 8, 2025, roughly 800,000 tons of wet material flooded Freeport-McMoRan's Grasberg mine in Indonesia, the world's second-largest copper source, killing two workers and forcing a force majeure that's still working through the supply chain. Freeport has cut 2026 output guidance at the complex by roughly a third, and a full recovery isn't expected before 2027 or 2028.
International Copper Study Group data show global mine output fell 1.1% in the first half of the year, with Codelco and Freeport both posting double-digit declines. Chile, the world's top producer, logged its weakest second quarter in at least 19 years and has cut its 2026 forecast twice, to a 2.6% decline. Codelco's Andes Norte expansion at El Teniente, meant to help offset losses from last year's fatal tunnel collapse, isn't due to reach production until 2029.
“It's declining grades at existing operations. It's tired, very, very old assets,” BlackRock's Evy Hambro said of the sector last month.
Then in early August, Congo added a new wrinkle, banning exports of copper and cobalt concentrate to force more processing onshore. The order affects a small slice of Congo's copper trade, most of which already leaves the country as refined cathode, but it still pushed LME prices up 1.8% the day it became public. Reuters columnist Andy Home called the reaction proof that “ Doctor Copper's panic attack is unlikely to be the last.”
The Commerce Department's deadline to recommend whether to extend tariffs on refined copper passed June 30, and more than two months later, the White House still hasn't decided. Traders aren't waiting: roughly 200,000 tons of refined copper flooded into the U.S. in July alone, the largest monthly inflow on record, pushing Comex inventories past 1 million tons as buyers race to beat a possible 15% duty that could take effect as soon as January.
None of this points to an immediate shortage of refined metal…
Morgan Stanley still expects refined output to inch up almost 1% this year even with mines producing less, as smelters lean harder on scrap. Mine supply is the bigger worry, and Wall Street is split on how bad it gets. Citigroup sees copper reaching $15,000 a ton by year end, and as high as $17,000 if AI-driven demand or a manufacturing rebound outpaces what the ground can deliver.
“Everyone is investing in copper, everyone likes copper,” Anglo American's Ruben Fernandes said. Supply, he added, will come. The question is how quickly.
By Michael Kern for Oilprice.com
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