Copper Slides 8% from August High Amid Supply Shortfall
Copper trades near $6.30 per pound, down 8% from its August record. Mine supply is shrinking, but demand fears weigh on price.
Copper prices trade near $6.30 per pound on Tuesday. This represents a decline of almost 8% from the record high set in early August. The metal posted its first losing week since June.
Steve Hanke, a professor of applied economics at Johns Hopkins University, advised investors to stay long on copper on September 9. His call was based on a structural supply deficit. The underlying data supporting his view has not changed.
Mine Output Falls for First Time Since 2017
Data from the International Copper Study Group shows global mine output fell by 1.1% in the first half of 2026. This marks the first annual decline in supply since 2017. Freeport-McMoRan’s Grasberg mine in Indonesia operates at roughly half capacity. A fatal landslide caused the disruption. Full output is not expected before early 2028.
Freeport-McMoRan cut its 2026 copper guidance from 1 billion pounds to 700 million. Chile trimmed its national production forecast by 2.6% for the second consecutive quarter. Average ore grades have slipped from 1.6% in 1990 to below 0.6% at many major mines. Producers must move more rock to extract less metal.
AI Demand Meets Tariff Uncertainty
AI data centers are creating a new source of demand. A megawatt of capacity requires 60 to 75 tons of copper. Analysts estimate AI facilities will add 475,000 tons of demand this year. Morgan Stanley expects a 600,000-ton deficit. The ICSG estimates the gap closer to 150,000 tons.
Washington delayed a tariff decision on refined copper imports. This action sent metal back into London Metal Exchange warehouses. Goldman Sachs argues the rally may have moved too far. It warns manufacturers could switch to aluminum if copper remains expensive.
Technical Indicators Signal Caution
Copper peaked at $6.92 on August 6. The price has since formed a triple top pattern. It broke below $6.53 and is testing support near $6.29. A deeper fall could bring $5.90 into play. The Relative Strength Index sits near 42, indicating the metal is not oversold.
