en.Wedoany.com Reported - The international copper market extended its rebound on Thursday, with prices rising 2.6% in New York afternoon trading to a latest quote of $6.27 per pound, equivalent to just over $13,800 per metric ton. Copper prices were boosted by Trump's statement that Iran is returning to the negotiating table, as well as falling oil prices driven by new US tariff threats. The US Commerce Department also announced plans to establish procedures by the end of fiscal year 2026 to expand tariffs of up to 50% to a broader range of downstream copper products.
Macquarie Strategy noted in a latest commodity compilation report that copper currently sits between bullish investor sentiment and weak physical fundamentals, with a significant gap between the two at current price levels. Analysts from the firm in London, Shanghai, and Singapore described this market state in a briefing titled "Spinning Plates," arguing that the world is not short of copper, expecting surpluses in the coming years, and that a shortage is unlikely in the near term.
Data confirms the assessment of oversupply. Since the start of 2025, visible inventories have increased by over 870,000 metric tons, with 444,000 metric tons added in 2025 and an additional 429,000 metric tons so far in 2026. London Metal Exchange (LME) inventories are at eight-year highs, while Comex inventories are at unprecedented levels. Macquarie estimates that an additional 550,000 metric tons of copper are stored off-exchange in the US. Copper prices rebounded from below $12,000 per metric ton at the end of March to over $14,000 per metric ton by the end of May, before retreating. Macquarie believes this move was driven more by position adjustments, short covering, and tariff-related trade flows rather than physical scarcity.
Amid potential US copper trade measures, traders have been pulling metal across the Atlantic through CME-LME arbitrage. Macquarie judges that the most likely outcome is sustained uncertainty rather than a clear short-term resolution, which would keep metal stranded in the US and create an artificial sense of scarcity in other parts of the market. In China, Macquarie believes buyers will hold back at current high prices. Despite falling imports and rising exports, China has seen seasonal inventory builds, with the typical destocking phase stalling prematurely. Outside China, demand is also weak, with spot premiums well below annual contract levels.
Mine supply continues to fall short of expectations. Data shows that the guided production of the 17 largest miners has decreased by 199,000 metric tons to 13.8 million metric tons. Supply disruptions are mainly from Kamoa-Kakula and Grasberg, with timelines for recovery and ramp-up delayed. Ivanhoe stated this week that its mine in the Democratic Republic of Congo will ramp up production in the second half of the year but maintains its 2026 production guidance at 290,000 to 330,000 metric tons, below the pre-flood expectation of over 500,000 metric tons in May 2025. Freeport-McMoRan had planned for Grasberg copper output to reach 771,000 metric tons this year, but after a mudslide, the Phoenix-based company expects full production to resume only by the end of 2027.
Considering the disruption allowances at Kamoa-Kakula and Grasberg, Macquarie forecasts mine supply growth of 1.3% this year and 4.4% in 2027. The firm also assumes Cobre Panama will restart in the second quarter of 2027 (a timeline that may disappoint some observers focused on First Quantum's challenges in the Central American country) and ramp up to an annual production of 385,000 metric tons within six months. On the demand side, Macquarie has lowered its 2026 global copper demand growth forecast from 2.0% to 1.8%, with China revised down to 1.1% and the rest of the world to 2.6%. The bank expects demand growth to improve to 2.2% in 2027 as markets outside China recover, but China remains a drag due to its sluggish real estate sector.
Macquarie is skeptical of near-term AI-driven copper demand. Data centers are fueling bullish sentiment, but project delays due to growing public opposition, grid constraints, equipment shortages, and the proliferation of optical connectivity technologies mean the impact on copper may be smaller and slower than market assumptions. Nevertheless, the bank still sees copper as structurally attractive in the long term. Its projections show mine supply growing at an average annual rate of 2.8% from 2025 to 2030, refined production growing at 2.4%, and demand growing at 2.8% driven by electrification and the energy transition. By 2030, the market should return to balance, implying that new projects are still needed.
The near-term core issue remains oversupply. Macquarie estimates the market was already in a surplus of 600,000 metric tons in 2025 and expects an additional surplus of 262,000 metric tons in 2026, even after accounting for 783,000 metric tons of disruptions. In 2027 and 2028, the surplus is expected to average over 700,000 metric tons per year. Based on this analysis, Macquarie has raised its 2026 average copper price forecast from $12,310 per metric ton to $13,165 per metric ton, reflecting price momentum and macro support. However, the bank still expects a market correction, forecasting a price bottom of $11,000 per metric ton in the third quarter of 2027. At the same time, it has raised its long-term copper price forecast to $10,200 per metric ton (in 2025 dollars).
