Copper made history on Monday. For the first time ever, the benchmark three-month copper contract on the London Metal Exchange surged past $13,000 per metric ton, briefly touching $13,187 before settling at $13,020—a gain of more than 4% in a single session.

The milestone caps an extraordinary run. Copper prices have climbed more than 20% since mid-November, and the metal's 43% gain in 2025 marked its best annual performance since 2009. Now, as 2026 begins, the rally shows no signs of exhausting itself.

The Perfect Storm

Three forces have converged to push copper into uncharted territory:

First, a labor strike in Chile. Workers at Capstone Copper's Mantoverde mine—representing about 22% of the operation's total workforce—walked off the job on January 2nd after failing to reach a new collective bargaining agreement. Capstone has warned that production will drop to just 30% of normal capacity during the strike, removing precious supply from an already tight market.

Chile remains the world's largest copper producer, accounting for roughly 27% of global output. Any disruption in the country ripples through supply chains worldwide.

Second, the specter of U.S. tariffs. President Trump's ongoing threat of broad import tariffs has triggered a scramble to ship metal into the United States before any new duties take effect. This has caused U.S. copper prices to trade at a persistent premium to those on the London Metal Exchange, creating arbitrage opportunities that are draining LME warehouse inventories.

"Overall supply shortfalls, coupled with regional dislocation caused by U.S. tariffs, are propelling copper to new heights."

— Analysts at China Securities Co.

Third, structural supply concerns. The mining industry has underinvested in new copper projects for years, even as demand has surged from electric vehicles, renewable energy infrastructure, and data centers powering the artificial intelligence boom. Some analysts estimate the global copper market will see a shortage exceeding 100,000 tons in 2026.

The $13,000 Threshold Matters

For copper, the $13,000 level isn't just a round number—it's economically significant.

SP Angel analyst John Meyer notes that $13,000 per ton is the breakeven price required to justify investment in the next generation of new copper mines. Below that level, many projects struggle to attract financing. Above it, mothballed projects become viable and exploration activity accelerates.

In other words, the market may be signaling that current prices are necessary—even essential—to incentivize the supply growth the world will need in the decades ahead.

The Bull and Bear Cases

Not everyone is convinced the rally has legs. Analysts at Macquarie have pointed to substantial "hidden inventories" of copper stockpiled outside exchange warehouses—potentially more than 360,000 tons in the United States alone. If these reserves come to market, they could cap price gains.

Macquarie's research suggests the global copper market may have actually been in surplus last year, with hidden stockpiles masking the true supply-demand balance.

Goldman Sachs, meanwhile, forecasts that copper prices will "decline somewhat from record highs" as 2026 progresses. The bank expects supply growth to eventually catch up with demand, easing the tightness that has fueled the current rally.

But bulls counter that the long-term fundamentals remain overwhelmingly positive:

  • The energy transition requires massive amounts of copper—an electric vehicle uses four times as much copper as a conventional car.
  • AI data centers consume significant copper for power infrastructure and cooling systems.
  • New mine projects take 10-15 years from discovery to production, meaning supply cannot respond quickly to price signals.

What It Means for Investors

Copper's surge has been a boon for mining stocks. Shares of Freeport-McMoRan, the world's largest publicly traded copper producer, have climbed 35% over the past three months. Southern Copper, BHP, and Rio Tinto have all posted substantial gains as well.

For broader markets, copper's rally is often interpreted as a bullish signal for global growth. The metal is so widely used in construction, manufacturing, and infrastructure that it has earned the nickname "Dr. Copper"—a tongue-in-cheek reference to its supposed ability to diagnose the health of the world economy.

If copper is right, the global economy may be stronger than many forecasters assume, despite ongoing concerns about inflation, trade wars, and geopolitical instability.

The Bottom Line

Copper's breakthrough above $13,000 is more than a market milestone—it's a message. The world's insatiable appetite for electrification, combined with years of underinvestment in mining, has created a supply crunch that could persist for years.

Whether prices stay at these elevated levels or retreat as Goldman predicts, one thing is clear: the age of cheap copper is over. And that reality will reshape everything from electric vehicle pricing to housing construction costs to the investment calculus for the green energy transition.