To The Moon

Since the start of 2026, copper prices have remained volatile but biased higher. On January 14, LME copper surged to $13,407 per ton, marking a new all-time high. As of today, copper is trading at $12,939.5 per ton. While prices have seen some intraday fluctuations and a modest rebound, copper has clearly slipped back below the $13,000 level.

Copper ETF Performance: Most copper mining-themed ETFs have delivered annualized returns exceeding 10% since the start of the year. The recent pullback following copper's price surge is also reflected in the after-hours price movements of copper ETFs. In today's after-hours trading, $Global X Copper Miners ETF(COPX)$ —the largest fund by assets—fell 0.01%, while $United States Copper Index Fund(CPER)$ rebounded 0.03% and $iShares Copper and Metals Mining ETF(ICOP)$ rose 0.83%.

The core driver behind this round of copper’s sharp rally followed by a pullback lies in easing expectations around U.S. tariff policy, alongside downward revisions to expected copper supply growth. Market dynamics have reflected this shift through slower inventory transfers and narrowing price spreads.

On January 14, 2026, Donald Trump stated that he had “currently decided not to impose tariffs on rare earths, lithium, and other critical minerals.” As copper is included on the list of critical minerals, the urgency of potential tariff hikes diminished significantly. As a result, after LME copper prices peaked on January 14, copper gradually retreated below the $13,000 level. Going forward, prices may continue to fluctuate in the near term but are unlikely to revisit such elevated highs.

Previously, concerns that the U.S. might impose tariffs on refined copper imports triggered a global shift of copper inventories into U.S. COMEX warehouses, creating a “scarcity premium.” As policy expectations eased, stockpiling activity cooled rapidly, driving prices lower.

The U.S. Department of Commerce has proposed delaying refined copper tariffs until 2027, starting at 15% and rising to 30% in 2028, though a final decision has yet to be made. Markets generally view the second quarter of 2026 as a key inflection point. If tariffs are ultimately implemented, the current wave of inventory hoarding is expected to come to an end.

Goldman Sachs believes that the recent surge in copper prices has been largely driven by a wave of stockpiling and speculative capital fueled by expectations of U.S. tariffs. This has created a temporary “scarcity premium” rather than reflecting a sudden tightening of actual supply and demand. As the U.S. delays its tariff decision—potentially pushing it back to next year or later—this expectation-driven premium faces pressure to converge.

Fundamentally, the recent copper price increase is not purely sentiment-driven but grounded in the reality of persistently tight mine supply. Market consensus remains markedly optimistic about copper mine supply growth in 2026–2027, underestimating the ongoing disruptions from multiple mining accidents in 2025 and the slow progress in restoring several mines to their designed capacity.

However, on January 16, $NVIDIA(NVDA)$ quietly corrected data in its paper: a data center rack with a capacity of 1 gigawatt, which the paper previously claimed required up to 500,000 tons of copper busbars, actually only needs about 200 pounds—a difference of nearly 2,500 times. Upon this news, copper prices immediately dropped significantly!

In reality, factors such as persistently rising global inventories and reassessed copper demand from data centers have caused actual demand to fall below previous expectations. Goldman Sachs reiterated that copper prices may soon face a more significant correction, as the market has gradually entered a state of oversupply.

Although strong demand from grid upgrades and new energy vehicles, coupled with the medium-to-long-term impact of global copper mine disruptions, remains robust, Goldman Sachs noted that current prices have deviated from the fundamental fair value of approximately $11,400 per tonne, primarily driven by inventory transfers and speculative capital.

Amid easing tariff policies, copper prices peaked last week. The LME's $13,000 threshold and COMEX's $6 per pound resistance are unlikely to hold, with prices expected to correct toward fair value through volatility. How would you position your portfolio?

Let’s see several related Copper ETFs:

$Global X Copper Miners ETF(COPX)$ primarily covers large and mid-sized global copper mining companies, ranking among the largest and most liquid copper mining ETFs. With assets under management exceeding $5.8 billion and a management fee of 0.65%, it has delivered a 12.5% annual return this year, benefiting from rising copper prices and mining stock resilience. The largest holding is $KGHM Polska Miedz S.A.(KGHPF)$ , accounting for 5.98% of net investments; the next largest holding is $LUNDIN MINING O(0RQ9.UK)$ , representing 5.58% of net assets.

$United States Copper Index Fund(CPER)$ directly tracks copper prices through a futures structure, exhibiting high correlation with copper pricing. With approximately $619 million in assets and a 0.65% management fee, it has delivered roughly 2.8% returns since 2026.

$iShares Copper and Metals Mining ETF(ICOP)$ covers copper and related base metal mining companies, featuring a more diversified structure and relatively lower volatility compared to pure copper mining ETFs. With current assets of approximately $290 million and a management fee of 0.47%, it offers a significant cost advantage within its category. Benefiting from the overall strength of the metals sector, it has delivered a year-to-date return of 11.4% since the start of the year. The top position is $Freeport-McMoRan(FCX)$ , with a 8.4% weight in net asset value, while the second-largest holding is $GMexico Transportes SAB de CV(GMXTF)$ ), accounting for 7.93%.