Key Takeaways:
LME copper rose 0.6% to $13,695 a ton on Tuesday, extending gains as Jefferies issued the most aggressive long-term price target on Wall Street and Goldman Sachs slashed its supply forecast.
"Turns out, we were not bullish enough on copper," Christopher LaFemina, analyst at Jefferies, said in a note to clients. He raised his 2030 copper price target to $8 a pound, or $17,636 a ton, roughly 30% above current levels and the highest known forecast among major Wall Street banks.
The Jefferies call aligns with a broader shift across sell-side metals research. Goldman Sachs lowered its 2026 global copper mine supply forecast by 350,000 tonnes, or about 1.5% of global output, citing extended disruptions at Indonesia's Grasberg mine and the Kamoa-Kakula operation in the Democratic Republic of Congo. Both mines are not expected to return to full production until 2028, according to Goldman analyst Aurelia Waltham's team. The bank raised its 2026 LME copper forecast to $13,735 a ton and its 2027 average to $13,800, up from $12,465 and $12,150 previously.
Supply tightness meets AI-driven demand
The supply-side constraints are colliding with a demand surge from artificial intelligence infrastructure. Goldman estimates hyperscale cloud operators will spend $800 billion on AI capital expenditures this year, much of it flowing into data centers that require copper-intensive power and cooling systems. LaFemina's thesis centers on what he calls "powering up America" — grid upgrades and electrification that he expects to accelerate copper consumption well beyond current levels.
HSBC told clients last week that metals prices are in an "upward cycle" driven by supply disruptions from the Middle East conflict and strong structural demand, warning of a potential "super squeeze." JPMorgan's metals team separately cited supply tightening, accelerated grid investment, AI data center demand and broader industrial electrification as drivers of the copper upcycle.
Three scenarios from Goldman
Goldman outlined three price scenarios that capture the key uncertainties. Under a sustained Hormuz Strait blockade, LME copper could fall to around $12,600 a ton as risk appetite contracts, before recovering. If the US announces copper tariffs in June 2026 effective January 2027, prices could break above $14,000 as importers front-run the levy, then retreat once tariffs take effect. If the US explicitly rules out copper tariffs, prices would average about $12,800 in 2027 as ex-US markets return to surplus.
US copper imports have already exceeded expectations in the first half of 2026, with Goldman projecting domestic stockpiles will reach 900,000 tonnes — up from a prior estimate of 550,000 — as companies accelerate purchases ahead of potential tariffs.
Geopolitical easing lifts risk appetite
Copper initially slipped as much as 0.5% during Asian trading before reversing higher after Iran and Israel agreed to halt strikes against each other, improving risk sentiment. Tin also advanced, rising 0.7% to $52,650 a ton on the LME.
China's May exports rose more than 19% from a year earlier, beating expectations and signaling robust demand for industrial metals. The strength was driven by AI hardware demand that offset disruptions linked to the regional conflict.
Despite the bullish outlook, some investors have pared positions. Aggregate open interest for copper on the Shanghai Futures Exchange fell to its lowest level since September, exchange data show, as concerns about potential Federal Reserve rate hikes and volatility in AI-related stocks prompted profit-taking.
LME copper at $13,695 a ton is roughly 22% below Jefferies' 2030 target of $17,636. The next catalyst for prices is the June Chinese industrial production data, which will provide the latest read on demand from the world's largest copper consumer.
This article is for informational purposes only and does not constitute investment advice.
