Copper markets face volatility amid surplus concerns and tariff shifts

The metals market is currently facing volatility driven by shifting economic indicators and geopolitical tensions. While gold is under pressure, copper has shown relative strength despite broader market struggles.

Market analysis suggests that copper's reported surplus may be fragile. Although the ICSG recently adjusted its 2026 forecast from a 150 kt deficit to a 96 kt surplus, copper prices remain high, trading above the $10,500/t consensus. This price level, influenced by tariff-related distortions, has suppressed downstream buying, leading to off-exchange inventories falling below levels seen during the COVID-19 pandemic.

There is speculation that a rejection of certain tariffs could present a buying opportunity for miners, who saw significant sell-offs during previous tariff-related market stalls. Analysts note that downstream consumers may be forced to absorb high prices, potentially creating sustained demand even as tariff trades unwind.