Copper extends gains as prices approach record highs

Copper prices rose during Thursday’s trading session amid growing concerns over global supply due to the Iran conflict and broader Middle East tensions, prompting several major financial institutions to raise their outlook for the industrial metal.

Developing new copper mines takes more than a decade, while the number of new mining projects continues to shrink. As a result, any supply shortfall can only be addressed through higher prices and, eventually, by substituting aluminum for copper in lower-value applications.

Front-month US copper futures are currently trading around $6.53 per pound, close to the record high reached last month.

The report noted that US copper prices continue to trade at a premium to global markets due to US tariff policies. Three-month copper on the London Metal Exchange is trading near $13,600 per metric ton, implying a premium of roughly 6% in the US market.

The United States is expected to make a final decision on copper import tariffs by the end of July, although markets have already begun pricing in the potential outcome.

Citigroup and Goldman Sachs raise copper forecasts

Citigroup has turned bullish on copper, saying uncertainty surrounding US tariff policy, combined with hopes for the reopening of the Strait of Hormuz this summer, is likely to push copper prices higher.

The bank’s analysts expect copper to reach $15,000 per metric ton within the next year.

Citigroup analysts said: “We expect continued strategic ambiguity from US policymakers rather than a clear and definitive announcement on tariffs. We believe the administration will not impose tariffs on refined copper, but it is unlikely to state that explicitly, in order to encourage the continued accumulation of excess copper inventories within the United States.”

Similarly, Goldman Sachs on Monday raised its year-end copper price target to $13,735 per metric ton from a previous forecast of $12,465.

The Iran conflict and supply risks

At the start of the Iran conflict, there were concerns that higher oil prices and geopolitical tensions would weaken copper demand. So far, however, that scenario has not materialized.

The report warns of a new risk facing the copper market: sulfur shortages. A significant portion of global sulfur supplies is shipped through the Strait of Hormuz, which remains closed.

Sulfur is a critical input in copper production. Without it, production costs rise rapidly, pushing prices higher and potentially slowing mine output.

Morgan Stanley also sees copper reaching $15,000

Morgan Stanley has likewise forecast copper reaching $15,000 per metric ton, noting that the metal is already trading near record highs while net long positions on the US COMEX exchange have climbed to record levels.

The bank said: “Although copper is already trading near all-time highs and net long positions on COMEX have reached record levels, we believe any pullbacks will be short-lived due to escalating supply disruptions, continued strength in US imports, and signs that China is once again rebuilding inventories during price declines.”

Morgan Stanley added that the upcoming US tariff decision remains the key market driver. However, the current price spread between COMEX and the London Metal Exchange is already encouraging copper flows into the United States.

The bank noted that if Washington ultimately decides to increase tariffs, the rally could accelerate even further.