August was a record month for copper. The price hit a record high several times, and prices held above $14,000 a tonne for their longest-ever run.
Tightening stockpiles drove the price gains, leading to a crunch in mid-August when the market’s backwardation – the premium of nearby contracts over later-dated ones – widened to its largest since 2021.
A steep backwardation like that is the market’s way of signalling that the metal is needed now. Mine disruption played its part — Congo and Chile both contributed.
But according to Standard Chartered’s base metals team, led by Sudakshina Unnikrishnan, the force holding copper aloft is a piece of unfinished policy business in Washington.
The Section 232 review that won’t end
At the centre of it is the US Section 232 review into copper imports. The Commerce Department was meant to conclude it by 30 June, and months later, there is still no decision.
Refined copper has so far escaped the tariffs already applied to downstream copper products, and whether that exemption survives is the question hanging over the market. The answer will shape Comex and LME prices, the spread between them, and the direction metal flows around the world.
Uncertainty reigns. With traders unwilling to be caught on the wrong side of a possible US levy, a premium has opened up on Comex over the London price. That gap has acted like a magnet, pulling copper towards American warehouses and away from other sources of demand. The result is a physical dislocation: Comex stocks have swelled while inventories on the LME and the Shanghai Futures Exchange have drained. Metal outside the US is now meaningfully tighter than the headline global figures suggest.
The late-August expiry told the other half of the story.
Metal was delivered into LME warehouses, the cash-to-three-month spread collapsed from around $545 to roughly $248, and three-month futures settled back below $14,000. By 26 August, LME inventories had rebuilt to around 16% above their February low.
Backwardation that steep was always partly short-covering into an expiry — a market mechanic as much as a supply signal.
What matters is where prices settle once it clears, and, so far, copper has remained at historically high levels.
Sharp shift in market dynamics
What makes this rally notable is how completely the market dynamic has turned in a matter of months.
Back in the spring, the risks were to the downside amid concerns about demand. In a note published on 24 April, J.P. Morgan was weighing the risk that the Iran conflict and a spike in oil prices would sap demand for industrial metals, with copper especially exposed. Its analysts sketched a bearish case in which prices could slide towards $11,100–$11,200 a tonne if the macro picture deteriorated.
Even then, the supply side was quietly tight. J.P. Morgan pointed to underused capacity at Grasberg in Indonesia following a fatal mudslide, downgraded guidance at Chile’s Quebrada Blanca, and a Chinese plan to curb sulfuric acid exports. And Chinese buyers, who account for roughly 60% of world demand, were busy picking up cheaper metal.
Four months on, the demand-destruction fears have faded, and the tight-supply story has taken centre stage, now amplified by the tariff overhang.
The question is no longer how far copper might fall, but how long it can stay this high.
Standard Chartered believes it could remain elevated for a while yet. Citing continued tariff uncertainty, thin ex-US inventories and ongoing mine-supply problems, the bank recently lifted its 2026 average forecast to $13,472 a tonne, up from $13,169. Its second-half forecast is higher still at $13,818, and it expects copper to remain historically high through the end of the year.
This is the market Majestic operates in. As a critical materials recovery company, we source end-of-life electronics, catalytic converters, batteries, solar material, and more, upgrade them at our own facilities, and return refinery-ready feedstock to global supply chains. When primary supply tightens, and metal flows are distorted by policy, recovered material becomes more valuable to the refiners who need it — and it arrives in weeks, not the decade it takes to permit and build a mine.
The metals, including copper, that the world is competing over are already above ground. We believe recovering them through recycling is the fastest available supply response to address the issues driving up prices.