Copper Approaches $13,700 as the Structural Deficit Deepens

By mid June 2026, copper had become one of the world's most closely watched commodities. On June 18, LME copper was trading at $13,735.50 per tonne, approaching the $14,000 level.

The structural case for copper had become increasingly difficult to ignore.

The International Copper Study Group projected a 150,000 tonne deficit for 2026, representing a major reversal from earlier surplus expectations. UBS forecast LME copper at $14,000 per tonne by September and $14,500 by year end, while increasing its medium term forecast to $6.00 per pound for 2027 through 2029.

Why was supply struggling?

Declining grades: Average copper grades across Codelco's ageing portfolio had declined from 1.02 percent in 2022 to 0.66 percent in 2025.

Mine disruptions: A fatal tunnel collapse at Codelco's flagship El Teniente mine resulted in production reductions. The restart of Freeport Indonesia's Grasberg Block Cave mine was delayed until early 2028.

Exploration challenges: Only approximately 5 percent of copper deposits discovered during the previous 35 years were found during the last decade.

Hormuz impact: The closure of the Strait of Hormuz disrupted supplies of diesel and sulphuric acid, both important inputs into copper processing. This increased operating risks and costs for mining operations.

The demand side was equally compelling. China's Yangshan premium, an important indicator of Chinese copper import demand, reached $100 per tonne, its highest level in 14 months. SHFE copper inventories declined by approximately 80 percent over four months.