Why Copper Could Reach Record Highs in 2026: White Copper Market Tightening

The copper market faces a defining moment. Major mine disruptions, combined with surging demand from energy transitions and AI infrastructure, are setting the stage for significant price moves in 2026. Here’s what you need to know about the white copper crunch.

The Supply Crisis Reshaping Copper Markets

Copper production took several critical hits in 2025, and the repercussions will extend well into 2026. Freeport-McMoRan’s Indonesian Grasberg mine—responsible for roughly 2% of global copper output—experienced a catastrophic incident when 800,000 metric tons of wet material flooded the primary block cave in late 2025. Seven workers died, and mining operations halted entirely. While some zones are expected to resume by late 2025, the main block cave won’t restart until mid-2026, with full production delayed until 2027.

Ivanhoe Mines’ Kamoa-Kakula operation in the Democratic Republic of Congo faced similar setbacks after a May seismic event triggered flooding. The company has been processing stockpiled materials to maintain output, but those reserves are expected to run dry in Q1 2026. As a result, Ivanhoe guidance for 2026 sits at 380,000-420,000 metric tons—well below the 500,000-540,000 MT range anticipated for 2027.

Meanwhile, First Quantum Minerals’ Cobre Panama mine could provide some relief. After a two-year shutdown, the Panamanian government approved lease reviews in September 2025, with operations potentially resuming in late 2025 or early 2026. However, ramping back to full capacity will take months.

According to Jacob White, ETF product manager at Sprott Asset Management: “Grasberg remains a significant disruption persisting through 2026. We expect these outages to keep the market in deficit.” This structural constraint is reshaping white copper dynamics across global markets.

Demand Surge Outpacing New Supply

Copper consumption is climbing due to three primary forces: the global energy transition, rapid AI and data center expansion, and urbanization across emerging markets. But 2025 saw an additional tailwind—US tariff concerns prompted massive refined copper imports into the country, pushing US inventories to 750,000 MT.

China’s role is particularly interesting. While its real estate sector remains depressed (prices expected to fall 3.7% in 2025 and continue declining), the broader economy proved surprisingly resilient, posting growth near 5% last year. The upcoming 15th five-year plan (2026-2031) prioritizes upgrading electrical grids, manufacturing capacity, renewable energy, and AI infrastructure—all copper-intensive sectors that should more than offset weakness in property development.

Natalie Scott-Gray, senior metals demand analyst at StoneX, points to a “perfect storm” developing in Q4 2025: easing China-US tensions, Fed interest rate cuts, and China’s new industrial policy driving capex toward high-tech sectors. These factors should sustain robust white copper demand through 2026 and beyond.

The Numbers Point to Scarcity

The International Copper Study Group’s October forecast reveals the squeeze ahead. Mine production is expected to grow just 2.3% in 2026 to 23.86 million MT, while refined production rises only 0.9% to 28.58 million MT. Meanwhile, refined copper demand is projected to climb 2.1% to 28.73 million MT—creating a 150,000 MT deficit by year-end.

Looking longer-term, a UN Conference on Trade and Development May report forecasts copper demand will spike 40% by 2040, requiring $250 billion in investment and 80 new mining operations. Yet half the world’s copper reserves sit in just five countries (Chile, Australia, Peru, the DRC, and Russia), introducing geopolitical complexity and development delays.

Wood Mackenzie estimates copper demand will jump 24% by 2035 to 43 million MT annually. Closing that supply gap requires 8 million MT of new production plus 3.5 million MT from recycled sources—a monumental undertaking when new projects like Arizona Sonoran Copper’s Cactus and Rio Tinto/BHP’s Resolution remain years away.

What This Means for White Copper Prices

With inventories near historic lows and deficits accelerating, conditions favor higher copper valuations. Scott-Gray expects average white copper prices could reach $10,635 per metric ton in 2026, with peaks potentially exceeding that level. Elevated physical premiums and regional price spreads suggest buyers may adopt “just-in-time” purchasing strategies, sourcing from bonded warehouses or directly from smelters rather than LME inventory.

Lobo Tiggre, CEO of IndependentSpeculator.com, calls copper his “highest-confidence trade for 2026,” citing demand growth vastly outpacing new supply additions. He anticipates deficits will broaden through 2027 and beyond as disrupted operations take years to normalize.

In a London Metal Exchange poll from StoneX, 40% of respondents identified copper as the best-performing base metal for 2026—a strong market consensus around white copper’s price trajectory heading into the year.