Will Copper Price Surges in 2026? Canada and Global Markets Face a Critical Supply Squeeze

The copper market is bracing for unprecedented tightness in 2026, with demand fundamentals painting a bullish picture while production disruptions continue to tighten supplies globally. This confluence of factors is reshaping how traders and investors think about copper price movements, particularly as emerging markets and energy infrastructure investments ramp up.

The Demand Side: A Structural Shift Driving Growth

Copper consumption is experiencing a structural upswing driven by three converging mega-trends. The global energy transition, particularly renewable energy infrastructure and grid modernization, is consuming copper at unprecedented rates. Simultaneously, artificial intelligence deployment and data center expansion are creating new demand vectors that were barely on the radar five years ago. Add rapid urbanization in developing economies, and the picture becomes even more compelling.

China’s economic trajectory deserves special attention here. While the country’s real estate sector remains in the doldrums—prices are forecast to decline another 3.7 percent in 2025 and continue sliding into 2026—the broader economy is rebounding with robust growth projected at 4.9 percent for 2025 and 4.8 percent for 2026. The nation’s new five-year plan (2026-2031) deliberately pivots away from property-driven growth toward high-tech manufacturing, renewable energy, and AI-related infrastructure. Each of these sectors is copper-intensive, and together they’re expected to generate net positive demand growth even as the property market languishes.

The International Copper Study Group (ICSG) estimates refined copper consumption will grow 2.1 percent to 28.73 million MT in 2026. This may sound modest, but it’s critical context for understanding the deficit dynamic taking shape.

Supply Disruptions: Years of Constraints Ahead

Here’s where the story gets complicated. Global mine production is expected to rise just 2.3 percent to 23.86 million MT in 2026, while refined production climbs a paltry 0.9 percent to 28.58 million MT. The math is simple: demand growth is outpacing supply growth, and the gap is widening.

The supply crunch stems from several major disruptions. Freeport-McMoRan’s Grasberg mine in Indonesia faced a catastrophic incident in late 2025 when 800,000 MT of wet material flooded the primary block cave, killing seven workers and halting operations. The company won’t resume the Grasberg block cave (GBC) until mid-2026, with full operations delayed until 2027. This single mine disruption will reverberate throughout the global market for at least 18 months.

Ivanhoe Mines’ Kamoa-Kakula operation in the Democratic Republic of Congo faced similar challenges. A seismic event in May caused flooding and forced temporary suspension. Though some operations have restarted, the company is still managing dewatering efforts. Critically, Ivanhoe’s stockpiled inventory will deplete during Q1 2026, forcing the company to slash 2026 guidance to 380,000-420,000 MT versus the normal 500,000-540,000 MT range.

BHP’s Escondida mine, the world’s largest copper mine, experienced temporary shutdowns early in 2025. Meanwhile, First Quantum Minerals’ Cobre Panama mine, shut down since November 2023 following a contract dispute, is expected to restart in late 2025 or early 2026—but ramping back to full production will take time.

For investors tracking copper price canada and global markets, it’s worth noting that supply disruptions in major producing regions (Indonesia, Africa, South America) typically create pricing dynamics that ripple into North American markets. The structural deficit forecast by experts suggests these regional price premiums could persist longer than typical cycles.

The Deficit Scenario: What It Means for Pricing

By the end of 2026, the ICSG forecasts a 150,000 MT deficit. Lobo Tiggre, CEO of IndependentSpeculator.com, believes this shortfall is his highest-confidence trade for 2026, predicting deficits will broaden over the next couple of years as new supply projects remain years away from coming online.

Arizona-based projects like Arizona Sonoran Copper Company’s Cactus brownfield operation and the Rio Tinto-BHP Resolution joint venture are promising, but both remain several years from production. On the scrap side, recycled copper can add perhaps 3.5 million MT annually, but this only partially offsets the structural growth in primary demand.

The UN Conference on Trade and Development noted in a May 2025 report that copper demand could grow 40 percent by 2040, requiring $250 billion in investment capital and construction of 80 new mines. The geographical concentration is also problematic: half the world’s copper reserves sit in just five countries—Chile, Australia, Peru, the DRC, and Russia. Geopolitical risk, declining ore grades, and permitting delays plague operations in each location.

Market Mechanics: Inventory and Price Implications

A secondary but important factor involves US inventory dynamics. Tariff concerns in 2025 drove a surge in refined copper imports into the United States, pushing inventory to 750,000 MT. While this temporary influx eased some tightness, it also distorted normal market flows. Looking ahead, these inventory levels may normalize, adding another deflationary headwind to market supply.

However, metal premiums are near record highs, and physical shortage signals are intensifying. StoneX’s Natalie Scott-Gray forecasts the average copper price could reach $10,635 per MT in 2026, with upside to even higher levels if supply tightens further. At such price levels, price-sensitive buyers may substitute aluminum where possible, though the practical limitations of such switches are real.

The Bottom Line for 2026

The copper market in 2026 faces a rare setup: a structural deficit, supply disruptions lasting months to years, and demand growth anchored to multi-decade mega-trends rather than cyclical booms. The ICSG and market analysts largely agree: copper is poised for sustained strength.

Investors monitoring copper price dynamics across Canada and global markets should recognize that deficits of this nature, persisting over multiple quarters, have historically triggered significant price appreciation. With low inventory, concentrated production disruptions, and demand growth exceeding new supply, the conditions are aligned for copper to emerge as the best-performing base metal in 2026. According to a London Metal Exchange poll cited by StoneX, 40 percent of respondents already see copper as the top-performing base metal candidate for the year ahead.