Cop­per between short­age and stock­pil­ing

The extreme price movements in gold and silver have drawn the spotlight. But copper, too, has delivered impressive price performance. At the end of January, intraday prices reached a record level of more than USD 14,500 per tonne, though quotations have since eased slightly, to a little above USD 13,000 per tonne at present.^[1] This strength reflects not so much the fluctuations in investor sentiment that appear to be driving gold and silver, but a physical market that has been out of balance for months.

The starting point for the rally dates back to autumn 2025, when a mudslide at Indonesia’s Grasberg mine triggered force majeure,^[2] and an abrupt shock to a market that was already tight. The International Copper Study Group expects refined copper production to grow by only 0.9% in 2026, at a time when there is a supply deficit of roughly 150,000 tonnes.^[3] With insufficient concentrate available, the processing stage is becoming the most serious bottleneck. 

In China, where domestic copper demand far exceeds local supply, policymakers and industry players have responded mainly with strategic measures. In early February, the state‑backed China Nonferrous Metals Industry Association (CNIA) recommended expanding state copper reserves and securing additional concentrate for buffer stocks.^[4] At the same time, the Shanghai Futures Exchange tightened margin and price limits to curb extraordinary volatility.^[5] Nevertheless, trading volumes and open interest on Chinese metal exchanges surged at the turn of the year, reflecting the strain all along the value chain.^[6]

In the short term, however, the rally in prices has encountered a natural brake. Around the Chinese New Year, many buyers have historically stepped to the sidelines. Record‑high prices are also weighing on industry margins, while financing costs continue to rise. Meanwhile, inventories at the London Metal Exchange (LME), Shanghai Futures Exchange and COMEX Commodity Exchange are increasing seasonally. And yet Chinese copper fabricators stepped in immediately when domestic prices briefly fell below 100,000 Chinese yuan - a sign, in our view, that pullbacks are likely to attract buyers quickly.

In the medium and long term, we expect demand to become more stable and less price‑sensitive. Large power grid projects, the expansion of charging infrastructure and the energy and cooling requirements of growing AI data centers will very likely require substantial copper volumes for years to come. The Chinese grid operator, State Grid, for example, now foresees investments of 4 trillion yuan for 2026 to 2030 – around 40% more than previously planned.^[7]

At the same time, a development outside Asia has further tightened supply: Since 2025, the United States has quietly built up the largest copper stockpiles in its recent history. We think the trigger was concern over potential tariffs on refined copper when Donald Trump returned to power. As a result, the price gap between the COMEX and LME exchanges apparently became so attractive at times that trading houses shipped large quantities across the Atlantic.^[8] In early February 2026, U.S. inventories exceeded 590,000 tonnes – five times the level of the previous year – while total holdings, including off‑exchange stocks, are estimated at around 1 million tonnes. Parts of this stockpile could eventually become part of the planned “Project Vault,” a USD 12 billion program to establish strategic raw‑material reserves.^[9] 

“Copper’s year-to-date move has been driven by supply tightness, with setbacks tied to positioning rather than shifts in fundamentals. Long-dated demand trends remain intact, helping explain why the market has seen sharp swings but no meaningful change in the broader narrative,” says Jose Cerda, Portfolio Manager for Commodities at DWS. 

In short, copper prices are rising because of a genuine global shortage – a combination of the Grasberg mine landslide, structurally tight concentrate supply, strategic stockpiling in China and the U.S. and robust investment programs in the energy and digital sectors. Though speculative flows may amplify the price swings, it is a very tight market that is behind copper’s rise.

Copper price and inventories moving in tandem

^{Sources: Bloomberg Finance L.P., DWS Investment GmbH as of 2/10/26}

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