Reference News Network, January 26 report: According to the French newspaper Le Figaro's website on January 19, copper, known as "red gold," has once again seen its price rapidly rise at the start of the year. After surging more than 40% in 2025, copper prices hit a historical high of $12,543 per ton at the beginning of 2026. Over the past 10 years, copper prices have more than doubled.

There are multiple factors that have tightened the market. In the short term, copper is under pressure due to concerns about U.S. tariff increases. Since August last year, the U.S. has raised tariffs to 50%, targeting semi-finished copper products and derivatives such as copper tubes, wires, cables, connectors, and electronic components. After the U.S. Department of Commerce completes its research, tariffs may further increase in 2027. This concern has led the U.S. to stockpile large amounts of copper, which also limits the available copper reserves in the market.

In addition, there are a series of disruptions related to natural disasters. The Grasberg mine in Indonesia, the world's second-largest copper mine, has been partially closed after a deadly mudslide. Analysts believe this could reduce its copper production by 590,000 tons, equivalent to 2.6% of global copper supply.

At the same time, demand for copper in industry has significantly increased, mainly due to the green energy technology transition (renewable energy, electric vehicles, etc.), artificial intelligence, and the modernization of power grids. Electric vehicles use four times as much copper as traditional vehicles, and data centers related to artificial intelligence also rely on copper cables.

Another reason is that the financial environment is favorable for increasing demand. John Prasal, head of the investment strategy department at Swiss private bank UBS, said: "The expectation of Federal Reserve rate cuts has also increased investors' appetite for raw materials."

Prasal emphasized: "Large traders such as Swiss Vitol Group have warned that spot shortages may occur outside the U.S. Goldman Sachs also said that prices may remain high for a long time, and now supply security has become a major strategic issue."

Capital Economics, a UK-based macroeconomic consulting firm, pointed out: "It will take some time for countries affected by disruptions to restore their capacity." The International Copper Study Group had previously estimated that global copper supply growth would be only 1.4% in 2025 and 2.3% in 2026.

However, Capital Economics believes that "this market euphoria will eventually fade." Even though concerns about supply still exist, the sharp rise in copper prices seems to be more "a result of the boom in other raw material markets." Capital Economics researchers believe that "the demand for precious metals driven by the fear of missing out" may dissipate in 2026, leading to a "rapid price decline."

In fact, opinions are divided. Analysts at Fitch Solutions, a U.S. company, maintain a cautiously optimistic outlook on metals and minerals in 2026. They believe most minerals will see moderate price increases because the pressure from tariffs is likely to ease, while the supply and demand relationship related to the energy transition remains tight.

The competition for key metals is accelerating. However, compared to the time-consuming and complex process of opening new mines, companies prefer to choose transactions that allow them to obtain strategic raw materials more easily. On January 9, mining giant Rio Tinto confirmed negotiations with Glencore of Switzerland for a merger. This deal aims to strengthen its position in the copper market and create a mining giant worth $260 billion. (Translated by Lu Longjun)

Original source: toutiao.com/article/7599584866803417635/

Statement: This article represents the views of the author.