Copper: Tariff distortions unwind, prices seen lower – TD Securities

Copper's current elevated prices are the result of speculative positioning, tariff-related arbitrage, and supply disruption headlines rather than a genuine global shortage, according to TD Securities analysts. They project that softer demand, normalization of trade flows, and returning mine capacity will pull copper prices down from their present elevated levels, as surpluses emerge through 2027.

The analysts maintain a constructive outlook for copper prices as money managers continue to increase their holdings in the metal. The unclear nature of Section 232 tariffs continues to support an arbitrage that draws copper into the U.S., reshuffling inventories across regions rather than reflecting a global shortage. Supply disruption headlines, such as the DRC's ban on concentrate exports, have further contributed to higher prices by offsetting weakening industrial demand.

Looking ahead, the analysts expect softer demand and a normalization of tariff-driven trade flows to reduce some of the tightness currently present in copper prices, pulling them down from the $14,000+/t levels currently seen in the market.