American Tungsten Corp. (TSXV: TUNG, OTCQB: DEMRF)
Building America’s Defense Critical Metals Supply
London Metal Exchange (LME) copper futures prices surged strongly towards the $12,000 per ton mark on Friday, with a year-to-date increase of over one-third. Market participants believe this copper price rally is not a cyclical rebound but rather a “perfect storm” driven by a combination of structural supply shortages and revolutionary demand trends. Synthesizing views from multiple institutions, copper prices are highly likely to remain elevated in 2026, with the potential to set new historical records.
It is worth noting that base metals are currently experiencing a broad-based rally, creating a positive sentiment resonance among them. Tin has surged nearly 50% this year due to demand for electronic solder; aluminum has strengthened on concerns over Chinese production restrictions and smelter shutdowns in Africa; nickel has rebounded on news of Indonesia’s planned significant cuts to nickel ore production in 2026. This overall bullish atmosphere creates a positive macro environment for copper prices.
The fundamental reason driving copper prices higher is the widening gap between the global “hunger” for copper and the mining industry’s “sluggish” supply response. The most significant signal comes from the mining sector. The 2026 zero processing fees (TC/RCs) agreement reached between Chilean miner Antofagasta and a Chinese smelter has completely overthrow industry norms, indicating that smelters are left with no profit margin in competing for extremely scarce copper concentrate.
Production disruptions and setbacks at major mines (such as Indonesia’s Grasberg and some projects in Chile) persist, while the investment-to-production cycle for new large-scale greenfield projects is lengthy, offering no near-term solution. The market is facing the most severe mineral supply shortage in years.
On the demand side, two mega-trends provide long-term support. First is the explosive construction of artificial intelligence (AI) infrastructure, whose demand for power, cooling, and data center wiring is copper-intensive. Secondly, the global energy transition (electric vehicles, renewable energy, grid upgrades), as an established national policy, may adjust its pace due to high prices, but its direction is irreversible. Institutions like Citi believe this “insatiable appetite” is the fundamental force driving prices.
Analysts believe the trajectory of copper prices in 2026 will be significantly influenced by several key variables. First, the threat of potential U.S. import tariffs has already led to abnormal inventory accumulation on the COMEX exchange, distorting global logistics. Any further trade tensions or policy changes in major producing countries (like Chile, Peru) could instantly ignite market sentiment.
Regarding inventory drawdowns, if the currently piled-up inventories in the U.S. start flowing to other tight regions globally (like China), it might alleviate localized pressure. However, global total inventories are at historically low levels, and any significant decline in inventories will directly support prices. Furthermore, if the U.S. dollar weakens or the global liquidity environment becomes looser, it will further enhance copper’s financial attributes and investment appeal.
Downside risks include: historically high copper prices will inevitably erode economically sensitive demand. Copper usage in traditional sectors (like construction, some consumer goods) may be compressed or substituted, and end-product price hikes may also suppress consumption. From a macroeconomic perspective, if growth in major global economies falls significantly short of expectations, it will weaken the overall demand outlook for industrial metals.
Currently, mainstream institutions are generally optimistic about 2026 copper prices. Citi holds the most aggressive view, predicting copper prices could reach $15,000 per ton in the second quarter of 2026. ING forecasts prices will reach $12,000 per ton in the second quarter of 2026. Market consensus tends to believe that copper prices will fluctuate widely within a high range of $10,000-13,000 per ton, and any major supply disruption news could push prices to test the upper limit.
In summary, it is highly probable that copper prices will remain elevated in 2026. Short-term fluctuations will revolve around inventory changes, policy news, and macroeconomic data. For investors and downstream enterprises, this means adapting to a new environment characterized by a permanently higher price floor and increased volatility. Copper, as the “new oil” of the electrification era, is seeing its strategic value repriced by the market, and any significant price pullback may present a window for long-term positioning.
