Banks Split On Copper Outlook As Citi, JPMorgan Turn Bullish And Goldman Counters

Copper extended its recent surge on the London Metal Exchange, with benchmark futures topping $11,700 a ton. It was the strongest rally since last summer, as investors began positioning for a possible regime of phased, near-universal copper tariffs starting in 2027.

A reinforcing narrative of tightening supply and dislocated inventories also played a role. Traders have been front‑loading shipments into the US to arbitrage higher domestic prices and to hedge against future import levies. That dynamic has left the London market increasingly exposed to swings in financing and stock movements, amplifying price volatility.

Two Bulls and a Bear

Citigroup has been vocally bullish, arguing that structural deficit comes from a disconnect between the new supply and rising demand – such as grid upgrades, defense spending, and the energy transition. The bank pitched a target of $13,000 a ton by Q2 2026, assuming tariffs proceed and macro conditions remain supportive.

“We have conviction in copper upside through 2026 supported by multiple bullish catalysts, including an incrementally constructive fundamental and macro backdrop,” analysts led by Max Layton said, according to Bloomberg.

Another major bank, JP Morgan, largely mirrors Citi’s constructive stance. The bank’s research arm projects a refined copper deficit of roughly 330,000 tons in 2026 and expects prices to reach about $12,500 a ton in the second quarter of that year, averaging just over $12,000 for 2026 as a whole.

Still, there is no consensus, as Goldman Sachs emerged as a key contrarian. The bank believes the current price levels are running ahead of fundamentals and that there is enough metal available to meet demand.

“Most of the recent copper price increase is based on expectation of future market tightness, rather than current fundamentals,” the bank’s commodity analyst Aurelia Waltham, wrote in a note. “We do not expect the current breakout above $11 000 to be sustained,” she added.

Mercuria Withdraws the Metal

Meanwhile, trading house Mercuria has taken aggressive action. The firm has ordered about $500 million of copper for withdrawal from LME warehouses, tightening available exchange stocks.LME inventory cancellations linked to Mercuria have been among the largest in more than a decade.

That apparent contradiction, headline stocks rising while deliverable metal outside America thins, has become a defining feature of the current cycle.

“This is the big one. If the world keeps going like this, we will be left without copper cathodes in the rest of the world,” Kostas Bintas, Mercuria’s Global Head of Metals & Minerals, told Bloomberg, warning that buyers outside the US could face critical shortages as early as the first quarter. He didn’t provide a price target but offered a warning.

“Just looking at the facts, mathematically… What is going to happen if all of this continues? There’s only one answer: there will be tightness and a higher price,” he clarified.

Price Watch: United States Copper Index Fund ETV (NYSE:CPER) is up 31.71% year-to-date.

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