Copper prices continue to climb steadily as supply pressures that have been anticipated for years are beginning to emerge across the global market.

According to the report’s author, copper remains “the simplest investment idea in the market,” arguing that current developments are unfolding exactly as expected. The world, the report says, does not have enough copper to meet the surge in demand expected from the expansion of artificial intelligence applications and the global energy transition.

At the same time, developing a new copper mine typically takes more than a decade, while the pipeline of new mining projects is becoming increasingly limited. As a result, any supply shortage can only be resolved through higher prices, followed later by the substitution of copper with aluminum in lower-value applications.

Front-month US copper futures are currently trading at $6.65 per pound, approaching the record high reached last month.

The report notes that US copper prices continue to trade at a premium to global markets due to US tariff policies. On the London Metal Exchange, three-month copper is trading around $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, with markets already beginning to price in the potential outcome.

Citigroup and Goldman Sachs raise copper forecasts

Citigroup has turned bullish on copper, stating that uncertainty surrounding US tariffs, combined with hopes for the reopening of the Strait of Hormuz later this summer, could push prices significantly higher.

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

“We expect continued strategic ambiguity from US policymakers rather than a clear and definitive announcement regarding tariffs,” Citigroup analysts said. “We believe the US administration will refrain from imposing tariffs on refined copper, but will stop short of confirming that explicitly in order to encourage continued stockpiling of excess copper inventories within the United States.”

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

War with Iran and supply risks

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

However, the report warns of a new threat to the copper market in the form of sulfur shortages, as a significant portion of global sulfur shipments passes through the Strait of Hormuz, which remains closed.

Sulfur is a critical component in copper production. Any disruption to supply could rapidly increase production costs and prices, potentially slowing mine output over time.

Morgan Stanley also sees copper reaching $15,000

Morgan Stanley has likewise projected copper prices reaching $15,000 per metric ton, noting that the metal is already trading near record highs while long positions on the COMEX exchange have reached unprecedented levels.

“Although copper is already trading near historical highs and net long positions on COMEX are at record levels, we believe any pullbacks will be short-lived given escalating supply disruptions, continued strength in US imports, and signs that China is rebuilding inventories during price declines,” the bank said.

Morgan Stanley added that the upcoming US tariff decision remains the market’s key catalyst, although the current price spread between COMEX and the London Metal Exchange is already encouraging copper shipments into the United States.

The bank also noted that any decision by Washington to increase tariffs could further accelerate the rally.

Copper mining stocks benefit from the rally

The report concludes by arguing that copper mining stocks remain the best way to gain exposure to the metal, highlighting that the COPX copper miners ETF rose 3.4% during the session and is approaching the upper end of its current trading range.