Copper prices are currently trading near $6.30 per pound, marking an 8% decline from the record highs observed in early August. This downturn follows the first losing week for the metal since June, despite recent bullish recommendations from economist Steve Hanke. Market analysts attribute the volatility to a combination of supply constraints and shifting demand dynamics.
Data from the International Copper Study Group indicates a 1.1% drop in global mine output during the first half of 2026. Operational challenges, such as the landslide at Freeport-McMoRan’s Grasberg mine in Indonesia, have significantly impacted production. The company reduced its 2026 output guidance from 1 billion pounds to 700 million pounds, with full capacity not expected until 2028. Additionally, Chile has lowered its national production forecast by 2.6%.
Geological factors further complicate supply, as average ore grades have fallen from 1.6% in 1990 to below 0.6% at major sites. Conversely, the rise of AI data centers is driving new demand, with estimates suggesting these facilities could require an additional 475,000 tons of copper this year. Forecasts for the annual market deficit vary significantly, ranging from 150,000 tons to 600,000 tons.
Market sentiment remains cautious as technical indicators show the price testing support levels near $6.29. A further decline could push the price toward $5.90. Meanwhile, Goldman Sachs has warned that manufacturers might pivot to aluminum if copper prices remain elevated. Recent delays in tariff decisions on refined copper imports by Washington have also contributed to the current downward pressure on the metal.
