Name: Whats behind coppers rally to a record high?
Uploaded: 2026-01-07T13:43:51.426Z
Duration: 2 min 1 s
Description: Morgan Stanley Lead Metals & Mining Commodities Strategist Amy Gower examines the drivers behind the rally in copper that pushed the metal above $13,000 a ton for the first time.

Morgan Stanley Lead Metals & Mining Commodities Strategist Amy Gower examines the drivers behind the rally in copper that pushed the metal above $13,000 a ton for the first time.

Copper prices have surged to a record high, supported by a strong overall metals market and a cycle of interest rate cuts, which benefit commodities and related sectors such as construction and autos. Investors are increasingly seeking exposure to real assets, with much of this interest focused on metals, especially copper.

The rally is further fueled by a tight supply situation, with disruptions from 2025 extending into 2026, and accelerated US demand that has absorbed available copper inventory. While Chinese demand remains important, the market is also being influenced by new drivers such as data centers and energy storage, with excess metal from softer Chinese demand being redirected to the US.

What's behind copper's rally to a record high?

just start with the latest leg higher in the copper rally. What's behind it? Yeah, look, I think we absolutely came into 2026 with a very strong backdrop for metals as a whole and particularly for things like copper. So, as you mentioned, the rate cutting cycle, that's a tailwind for commodities, non-yielding assets, also helpful for many of the end-use sectors that metals depend on, things like construction, autos. So, those rate cuts are supportive. We also have investors looking for real asset exposure and a lot of that within commodities seems to be going into the metal space at the moment. And then for copper specifically, I would say you've had this very, very tight supply backdrop through 2025. Many of the disruptions we had there are spilling over into 2026. And then also, the U.S. is scooping up every spare ton of copper available and that really accelerated through December. And I think the market has come back. It's a new year. Everyone's looking at this data and waking up to the fact that although we do have a lot of inventory in the U.S., it's not really acting as inventory at the moment. It's sort of locked there and unlikely to leave. Emi, for a long time when it came to copper, we'd just talk about one thing, show me Chinese demand and we'll figure out what's going to happen with copper prices. Are the characteristics of this metal changing? Yeah, look, I think Chinese demand absolutely is still important. And I think when there's clarity one way or another on whether the U.S. might introduce copper tariffs in 2027, which is currently a floated possibility, then I think the market will start to focus again on Chinese demand. But absolutely, I think this is shifting. Historically, China probably drove almost all of the demand growth we had over the last 10 years. And if we look at the next 10 years, the drivers might still be in China, but there are things like data centers, stationary storage batteries, the grid. So, these are drivers that we know will keep developing. But it is worth saying Chinese demand is looking a little soft. But at the moment, the market is not really feeling that because where there might be any excess metal, it's just making its way over to the U.S.

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