The global copper market has enjoyed a sustained period of success, reaching successive record highs, with bullish sentiment largely underpinned by tariff-driven uncertainty, and further bolstered by supply-side issues and AI-driven demand optimism, highlights market research company BMI.

Having peaked at $14 875/t on September 10 and remaining well above $14 000/t as of November 5, the company reports that copper has largely shrugged off macroeconomic headwinds, especially ahead of a possible US tariff policy announcement.

“The prospect of copper tariffs has prompted market players to pre-emptively stockpile copper in the US ahead of the tariff decision.

“The possibility of a tariff on refined copper has re-widened the commodity exchange (Comex) premiem over the London Metal Exchange (LME), creating a substantial incentive to redirect metal into the US over the course of 2026,” BMI notes.

It notes that tariff-driven dislocation has reinvigorated a build-up in Chicago Mercantile Exchange (CME) copper, which continues to reach record highs, having risen by 61.9% from the start of the year to November 4.

The company says this follows a steady accumulation of copper in the US during the previous year, leaving the market in an “artificial deficit” by constraining copper availability outside the US.

“Any challenge to protectionist rhetoric or a watering-down of the tariffs would test the metal’s upside by prompting a reassessment of the embedded tariff premium.

“Downward pressure would likely ensue given the elevated inventory levels already built up within the US, representing the most bearish near-term outcome, as import demand and stockpiling incentives fade sharply,” BMI says.

The company points out that a portion of the US copper stockpile is nonetheless likely to persist for some time, as domestic industry stakeholders seek to shield the country’s manufacuturing base from supply scarcity and price volatility amid the broader pivot towards securing the consistent supply of critical minerals.

Further, global copper markets continue to see price support driven by structural shifts rather than speculative trading alone.

“Copper’s recent rally cannot be put down to tariff jitters alone, with underlying supportive fundamentals remaining largely intact for the red metal. The emergence of AI as a new demand pillar alongside persistent and more pronounced mine-supply constraints has reinforced key support levels.

“The data centre build-out, alongside grid expansion and electrification, has become an increasingly power-hungry source of copper consumption, contributing to price volatility throughout the year,” BMI notes.

The company’s technology team also highlights that regulatory friction surrounding AI infrastructure will intensify, with about 53% of hyperscale pipeline growth concentrated in US States with shifting executive control, such as Texas, Georgia, Ohio and Pennsylvania, now exposed to heightened slowdown risk.

BMI has also reported on the issue of persistent mine supply constraints, with new development projects taking about 17 years to move from discovery to production.

The company adds that declining ore grades, together with permitting, political and execution risks predate any tariff decision.

That said, BMI says that while the US-led tariff policy is not the sole driver behind copper’s upward momentum, tariff-related positioning constitutes a sizeable chunk of the current momentum.

In other regions, the risk of El Niño exacerbating persistent supply constraints across the Copperbelt in Africa and in Latin America could underpin prices and limit downside issues should the US decision trigger a correction.

Ultimately, the copper market remains highly active despite the lack of a final ruling and tariff-related trade disruptions have intensified existing supply shortages, keeping investor confidence aggressively high, BMI concludes.