Copper prices continued their strong upward trend during trading in December, achieving remarkable price jumps that exceeded the $12,000 per ton mark, amid growing global concerns about the expected supply shortage by 2026. This rise is driven by fundamental changes in global supply chains and expectations of increased industrial demand.
Record performance nearing historic high
The price of copper reached a new high of 0.8% during Wednesday's trading, hitting $12,156.50 per ton, just $3 shy of its all-time high. Data from the London Metal Exchange indicates that copper is on track to end the year with annual gains of up to 38%, its strongest performance since 2009, reflecting strong investor appetite for industrial assets.
Drivers of the rise and the economic context
Analysts attribute this surge in copper purchases to hedging strategies employed by investors and major manufacturers, with massive quantities of the metal being pumped into the United States as a preemptive measure to avoid potential import tariffs imposed by the US administration. These moves have created pressure on available stocks in the rest of the global market, raising the specter of a supply crisis for buyers outside the United States.
Strategically, copper is gaining increasing importance as a vital element in the global energy transition, being a key component in the electric vehicle industry, renewable energy power plants, and smart grids. With the accelerating pace of the shift towards a green economy, experts anticipate that demand will outstrip supply, reinforcing the "scarce market" hypothesis in the coming years.
A collective rise in base metals
Copper wasn't the only winner, as the six base metals listed on the London Metal Exchange (copper, aluminum, zinc, lead, nickel, and tin) are all on track for collective annual gains, despite supply-side challenges and signs of weakening industrial demand at times. These increases highlight a state of "industrial inflation" in raw material costs.
- Aluminum: It recorded an increase of about 16% during 2025, affected by the slowdown in production growth in China (the world's largest producer) as a result of environmental restrictions, in addition to rising energy costs that forced smelters in other parts of the world to reduce production.
- Zinc and tin: Zinc rose by 5%, driven by production shutdowns at several major mines. Tin, on the other hand, saw a dramatic 48% jump, a direct result of Indonesia's crackdown on illegal mining – a major exporter – which has dried up reserves and sharply reduced global supply.
In conclusion, this collective surge points to a potential commodity supercycle, where geopolitical factors intersect with production constraints and energy transition to shape a medium-term market characterized by high prices and scarce resources.
