The price of copper could rise to $22,050 per tonne within a few months. Deutsche Bank made this forecast for the second quarter of 2027, which would mean an increase of around 50% compared with levels at the end of September. The bank points to a phenomenon that could be more important than the increase in industrial demand itself: an increasing share of physical metal is being accumulated in the United States and China and is therefore remaining outside the current flow of trade available to buyers in other parts of the world.
The US market has been operating for months under the influence of expectations surrounding tariffs. The United States is a net importer of refined copper, so the prospect of restricting imports creates a strong incentive to bring metal into the country earlier. Since 1 August 2025, a 50% tariff has applied to imports of semi finished copper products and products that make intensive use of copper. At the same time, the US administration received a recommendation to introduce a universal tariff on refined copper of 15% from 2027 and 30% from 2028.
This created a difference between the price of copper in the United States and prices on the London market. For market participants, this means that it is profitable to bring metal into the US and place it in warehouses even if it is not needed for immediate production. The greater the price difference, the stronger the incentive to direct additional deliveries across the Atlantic.
Deutsche Bank estimates that over the past year the United States accumulated around 600,000 tonnes of refined copper, while by the end of 2026 US inventories could reach around 1.3 million tonnes. China, in turn, is estimated to hold around 2.05 million tonnes in strategic reserves. According to the bank’s analysis, by the end of this year the two countries could together control around 71% of global copper inventories located outside mines. (Investing Live)
For the global market, what matters is not only how much copper exists, but how much of that metal is actually available to a buyer who wants to purchase it now. If a significant share of inventories is held in strategic or commercial warehouses and is not intended for immediate sale, the nominal size of global reserves becomes an increasingly poor measure of the actual availability of the raw material.
Warehouses are becoming part of the market
The availability of physical metal is precisely one of the main elements of Deutsche Bank’s current forecast. Daniel Ghali, head of the bank’s metals research, believes that the copper market is moving away from a situation in which demand growth was the most important factor and towards a problem involving the liquidity of physical supply. (The Economic Times)
The mechanism is important for industry. A smelter may produce copper, a mine may increase output, and an exchange may report a certain level of inventories. This does not mean, however, that a buyer in Europe, Asia or South America can easily purchase the required amount of metal in the right place and at the right time.
In the United States, an additional factor is the price premium of contracts on the COMEX exchange compared with the London Metal Exchange. If the US market pays more, metal flows to where it can obtain the higher price. Once it has been moved to the United States, returning it to other markets may be less economically attractive, even if the original reason for the purchase ceases to matter. Deutsche Bank points out that some of the copper held in US warehouses could remain there under such conditions instead of returning to the global market. (Investing Live)
This leads to a situation in which two processes reinforce each other. A higher price in the United States attracts metal to US warehouses, while lower availability of metal outside the US increases price pressure in other markets. For a raw material that is so important to industry, this also means greater competition among buyers.
A new mine will not solve the problem next year
The second element of the equation is limited supply flexibility. Copper production cannot be increased in response to a price increase at the same pace as the production of many manufactured goods can be increased. A new mine requires years of investment, permits, infrastructure construction and the commissioning of processing facilities.
That is why the short term supply response is limited. According to estimates cited by the Chinese economic portal Mysteel, a 10% increase in the price of copper would increase global annual supply by only around 180,000 tonnes, with a significant share of the additional metal coming from scrap recovery.
This is important because it is precisely the low flexibility of supply that means that even a relatively small gap between demand and available metal can lead to a large price change. The market must find a price level that limits some demand, increases the use of scrap, encourages substitution with other materials and improves the economics of investment in new sources of supply.
The problem is that most of these mechanisms operate with a delay. The price can rise very quickly, while new mine production may not appear for several years.
Copper enters the substitution game
Deutsche Bank assumes that current price levels are not yet high enough to trigger large scale substitution of copper with aluminium. If prices were to approach $22,050 per tonne, however, the economic calculation could begin to look different for some industrial applications.
Aluminium is cheaper and can replace copper in some applications, particularly in the power sector. It is not, however, a one to one substitute. Differences in electrical conductivity, weight, mechanical properties and equipment design mean that switching from one material to another requires design changes.
Therefore, a high copper price can trigger substitution, but it does not necessarily have to reduce demand for the metal immediately. In many industrial segments, copper will remain necessary regardless of its price, while the possibility of replacing it with aluminium will depend on the specific application.
This is where one of the mechanisms that could eventually limit Deutsche Bank’s most extreme scenario comes into play. If the price of copper becomes high enough, some buyers will begin reducing their consumption. There will be greater interest in aluminium, scrap and design solutions that make it possible to reduce the amount of copper used per unit of product.
The commodity supercycle returns to the game
The current situation also fits into the broader debate about a possible commodity supercycle. Former Goldman Sachs commodities chief Jeff Currie argued in an August analysis that commodity markets could enter a period of sustained price increases. In his view, the important factors include limited physical supply, weakening currency values and growing political intervention in commodity markets.
In the case of copper, these factors are particularly clear. The raw material is needed for power generation, transmission grids, the energy transition, electric mobility, electronics and data centres, while its supply remains dependent on investments that cannot be increased quickly.
Industrial policy is another factor. The United States treats access to copper as an element of industrial and energy security, with tariffs already introduced and additional instruments concerning imports and the domestic market being prepared. (The White House) China, meanwhile, has been building strategic reserves of raw materials for years, meaning that some of the world’s metal also remains outside current trade flows.
As a result, the copper market increasingly resembles something more complex than a simple relationship between a mine and an industrial buyer. The price is influenced not only by how much metal industry consumes, but also by where the copper is physically located and who is prepared to hold on to it.
$22,050 per tonne is not the only possible scenario
Deutsche Bank’s forecast is exceptionally strong, but it does not mean that $22,050 per tonne is inevitable. The mechanism presented by the bank itself assumes that the market will respond to high prices. If copper becomes expensive enough, some buyers may reduce consumption, increase their use of aluminium and scrap, while higher margins could improve the economics of production from existing deposits.
It is also important that forecasts from other institutions are lower. For example, in September CRU forecast an average copper price of around $14,500 per tonne in the fourth quarter of 2026. This shows that $22,050 in the second quarter of 2027 should be treated as a specific scenario based on particular assumptions, rather than as the market wide consensus.
The most important indicator therefore remains the availability of physical metal. If the United States continues to attract copper with a price premium, China continues to increase its strategic reserves, and mine production is unable to respond quickly to higher prices, pressure on the market will persist.
In such a situation, a record price does not have to be the end of the story. It may instead be the point at which industry begins making costly decisions to replace copper with other materials, increase the share of recycling and secure supplies several years in advance. The pace of these changes will determine whether the projected $22,050 per tonne becomes a temporary peak or another stage in a much longer commodity cycle.
