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Investing.com - Supply issues should persist for copper in 2026, after concerns over the global availability of the metal pushed its prices up to record high on Wednesday, according to analysts at BofA Securities.
Traders have been shipping increasing amounts of copper to the United States as part of a bid to avert possible sweeping tariffs under the Trump administration. Supply to other regions has tightened as a result.
This trend, as well as the prospect of a December Federal Reserve interest rate cut stimulating economic activity, have weighed on the U.S. dollar and lifted copper. Futures on the London Metal Exchange were last 1.6% higher at $11,362.00 a metric ton on Wednesday, following an intraday peak of $11,434.50 a ton.
In a note, the BofA analysts including Michael Widmer and Danica Averion said copper could stay in deficit into 2026, unless demand in China contracts by more than 3%.
Copper demand in China, long the world’s largest consumer of the industrial metal, is anticipated to slow following an expansionary period that has helped drive copper prices up to above $10,000 a metric from $1,500 a quarter of a century ago.
Shifts in regional policies, infrastructure cycles, and geopolitical changes, have all been cited as potential headwinds to Chinese copper demand. The BofA analysts predicted that the country’s copper demand will grow by just 0.5% on an annualized basis in 2026, the lowest level since 1988.
Still, stronger demand in the U.S. and Europe could be one particular factor offsetting the slowdown in China, the BofA analysts said.
They added that they held a “constructive” view of copper, even though the broader economic backdrop was tipped to remain “challenging” next year. Copper could rally to an average of $11,750 a ton in 2026, the strategists predicted.