Weekly Market Recap (December 5) – Copper Soars to Record High

Copper prices surged to a fresh all-time high on Wednesday, breaching $11,400 per ton on the London Metal Exchange (LME) and shattering a record set just two days prior. The dramatic rally was fueled by a massive wave of withdrawal requests from LME warehouses—the largest since 2013—triggered by soaring orders from South Korea and Taiwan, highlighting intensifying global supply concerns.

The red metal has climbed roughly 30% this year, with gains accelerating sharply in recent months. Early Wednesday, LME three-month copper rose 2.4% to surpass the $11,400 mark. A clear signal of market stress emerged from inventory data: sources revealed that trading giant Mercuria Energy Group spearheaded requests to withdraw approximately 50,000 tons of copper from LME depots, an order worth about $500 million. This cancellation of warrants, the biggest in over a decade, propelled prices toward historic levels above $11,500.

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Analysts point to a confluence of drivers behind the parabolic move:

1. U.S. Tariff Threats Reshape Trade Flows: Since former President Donald Trump announced plans in February to impose tariffs on copper imports, the global trade landscape has been upended. A resulting price premium for copper on the Comex exchange in New York over the LME sparked a rush by merchants, including Mercuria, Trafigura Group, and Glencore Plc, to ship metal to the U.S. for arbitrage. Although Trump temporarily suspended tariffs on commodity-grade copper in late July, his pledge to revisit duties on refined metal next year has traders again racing to stockpile copper in the U.S. ahead of any potential levies.
2. Persistent Supply Disruptions: A series of accidents at major mines in Chile and Indonesia earlier this year have constrained global output, tightening the physical market. Executives and analysts have repeatedly warned that ongoing mine disruptions risk creating significant supply shortfalls.
3. Demand Signals and Macro Uncertainty: Despite the chaos surrounding trade policies, economic resilience in several regions has supported demand. Copper, a key industrial metal vital for electrification, construction, and manufacturing, is often viewed as a barometer of economic health. However, Scott Crooks, principal analyst at Chile’s CODELCO, cautions that macro trends remain the critical unknown for 2026, stating that policies and geopolitical repositioning will be the ultimate price drivers.

Market participants are bracing for further volatility. Kostas Bintas, head of metals trading at Mercuria, recently predicted prices would push deeper into record territory as shipments to the U.S. accelerate. He warned that buyers outside America could face a “critical” shortage of cathode copper by the first quarter of next year, stating, “If the world keeps going like this we will be left without copper cathodes in the rest of the world.”

Supporting this view, analysts at Goldman Sachs Group Inc. noted in a Wednesday report that conversations with physical traders point to a “larger-than-expected reacceleration of copper flows into the U.S. in H1 2026.” They identified the day’s price rally as being “driven by LME cancellations, which are likely to free up metal to deliver to the U.S.”

While U.S. ports and exchange warehouses now hold substantial stockpiles, analysts expect this metal will remain there as long as the Comex premium and tariff threat persist. Traders are actively positioning for a tighter market ahead, ordering an additional 7,450 tons of copper from LME warehouses on Thursday. The global copper market is now navigating a new, tense phase dominated by geopolitics and trade policy.

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