Copper closed Tuesday inside the range it's held for three months—$10,000 to $11,000 on the LME—while the rest of the commodity complex and equities rallied hard into quarter-end. The metal everyone agrees will be structurally short by decade's end is trading like the shortage already started, and the actual surplus sitting in warehouses today is the market's least favorite fact.
Goldman Sachs Research expects copper to average $10,710 in the first half of 2026 and forecasts the global market to end this year in a 500kt surplus, with another 160kt surplus in 2026. That's not the story anyone holding copper wants to hear. The narrative for two years has been grid build, AI power demand, electrification, and the supply cliff coming in 2029. All true. All structural. And all priced.
What isn't priced is that Chinese refined copper demand fell 8% year-on-year in Q4 2025 as stimulus faded and tariff front-loading exhausted itself. Goldman estimates Chinese demand dropped to 8% year-on-year in the fourth quarter of 2025, as the boost from stimulus policies and tariff-related front-loading at the beginning of the year waned. China is half the world's copper consumption. When that drops 8% in a quarter, the surplus isn't a forecast—it's sitting in a Shanghai warehouse right now.
The bulls will tell you supply constraints matter more. Ongoing mine disruptions and long development timelines continue to constrain supply growth, and as a result copper markets remain structurally tight, even with modest demand growth. Correct—in 2029. Today the global market has more copper than it needs, will have more copper than it needs through 2026, and Goldman does not expect the global copper market to enter a shortage any time soon.
Yet the tape trades at $10,000-plus because the structural deficit story—the one that plays out in 2029 and sends LME to $15,000 per tonne by 2035—is so compelling that it's blinding the market to the inventory in front of it. The quarter-end window dressing today kept copper stable while tech ripped and geopolitical risk unwound, but the metal didn't rally with risk assets. It traded flat, because there's no catalyst to push it higher when supply exceeds demand by hundreds of thousands of tonnes.
The coming U.S. tariff on refined copper imports—expected by mid-2026—will scramble the positioning, not the fundamentals. Goldman's base case is that a refined copper tariff of at least 25% will be implemented shortly after June 2026, and flows of copper to the U.S. may accelerate as importers build up stock before the tax comes into effect. Front-running a tariff isn't demand; it's a pull-forward that makes the 2027 surplus worse. Goldman expects copper prices to decline slightly after the tariff is implemented, then resume its upward trajectory. Translation: buy the dip after everyone who front-ran the tariff realizes they own too much copper.
The market wants to price 2029 today. It will. But first it has to clear two years of surplus, a China demand picture that's deteriorating not improving, and the reality that every long in this market is holding because of a thesis three years out. Structural tightness is real. It's also not yet. The pain trade is lower, and it starts the day the bulls admit the surplus isn't a model—it's the market.