Copper Hits All-Time-High As Physical Economy Reprices Scarcity

Copper futures in London reached a record high on Tuesday as expectations of US tariffs drew record volumes from the seaborne market into US warehouses, tightening availability elsewhere despite subdued demand. As we highlighted on Monday, deteriorating conditions across global mining operations are adding to supply woes.

Benchmark three-month futures on the LME gained nearly 1% to reach $14,533 a ton, exceeding January's peak before trimming some of those gains.

Dr. Copper is breaking out...but this isn’t mainly a growth signal.
Tariffs sparked the squeeze. AI power demand could extend it.
Here’s what drives the next leg and what breaks it.https://t.co/tWrYrRYWxy

— The Market Ear (@themarketear) September 8, 2026

The industrial metal, critical for AI and power grid buildouts, has climbed 17% this year and 47% over the past 12 months, according to Bloomberg data.

Veteran commodities strategist Jeff Currie reiterated his warning on X that the "physical economy is repricing scarcity in the real world."

Currie, the former Global Head of Commodities Research at Goldman Sachs and now co-chair of Abaxx Markets, expanded on that idea:

Copper's record-breaking run above $14,500/ton should get everyone's attention. It is the latest sign that the physical economy is repricing scarcity in the real world.

Yes, part of yesterday's move reflects tariff front-running and metal being pulled into US warehouses. But that doesn't paint the whole picture.

Metal stranded in one part of the world is unavailable to everyone outside it. Scarcity is not just about how many tonnes exist, it is about having the tonnes in the right place at the right time.

You cannot build data centres, expand grids, electrify industry or duplicate supply chains without copper. Yet supply cannot respond quickly enough because of the same constraints I have highlighted in the thread below.

This is the latest rotation of the commodity cycle. Last month it was grain. Last week it was diesel. Today it is copper.

Weather, war and policymaking are the three horsemen that have combined against underinvestment (the revenge of the old economy) to create a scarcity problem that shows no signs of being solved. The bears will say the metal exists. Fine. But if it is locked in a warehouse, it is just a pile of metal.

Just two weeks ago I said the next phase of this cycle would bring "higher highs across more markets". Copper is now doing exactly that.

Copper’s record-breaking run above $14,500/ton should get everyone’s attention. It is the latest sign that the physical economy is repricing scarcity in the real world.

Yes, part of yesterday’s move reflects tariff front-running and metal being pulled into US warehouses. But… https://t.co/6eFZDXlDQv

— Jeffrey Currie 🆔++ (@CommodMkt) September 7, 2026

Adam Gillard, managing director in commodity sales at Goldman, wrote in a note overnight:

LME copper makes a new all-time-high on 80% YTD adv. Despite the catchy headline we don't think there is anything new today; vol is offered as flat price moves higher and we think option positioning is 3/10 max. Think the franchise has 4/10 futures length to play a grind higher as LME continues to tighten on strong US imports. We have modest length mainly via LME spreads. As stated previously, the damage has been done; the threat of a US tariff was enough to shift all surplus metal to the US. Current dynamic of high imports, financed be Wall Street, without an inflationary tariff, is optimal from the administrations perspective; if imports drop off think tariff rhetoric changes given continued Critical Mineral security concerns.

Gillard continued:

Side-note: Never in my career did I think we'd see both (global) inventory and price on the highs together. No shortage of copper, just all in the wrong place (CMX). Regional deficit trading gtc.

Mine supply: Running negative y/y but this is not new; with global inventory up YTD hard to argue against being in a (global) cathode surplus. TCs a red herring. Frankly none of this matters; think we'll be trading regional deficits for the foreseeable.

US Imports: Remain firm; August should be ~200k MT whilst MTD September is already tracking at 77k MT basis ship-tracking data. We think the US has over-imported 730k MT YTD.

LME Spreads: Which is why LME term structure keeps flaring; smelters can't run concentrate related shorts to prompt anymore to compensate for the lower headline TC given there is so little available metal outside of China / US.

Chinese Positioning: Not stretched despite low domestic inventory; think they struggle adding length on the ATH with relatively tepid end-demand

Scrap: Remains tight with secondary rod production still contracting by 50% y/y which is supporting cathode / apparent demand (& continued outperformance vs end demand)

Chinese Inventory: Continues to draw, both upstream (-41% y/y) and downstream (-8% y/y), in part due to scrap-related tightness

Michael Cuoco, head of metals at StoneX Financial, said the combination of strong demand growth and supply challenges "should bring about a tighter future market balance supporting higher prices."