Looking back at the first half of 2026, copper prices experienced a surge followed by a decline, aligning with the forecast of a high-then-low pattern outlined in our annual report. This movement was driven by Middle Eastern geopolitical tensions, a tightening global copper supply, and the seasonal shift in traditional consumption patterns.
Looking ahead to the second half of the year, a combination of supply inelasticity and demand flexibility is expected to provide underlying price support. However, the potential for prolonged geopolitical issues, risks associated with U.S. interest rate hikes, tariff disruptions, and the upcoming U.S. midterm elections introduce significant volatility to the macroeconomic outlook. This macro uncertainty is unlikely to align with fundamental supply-demand dynamics, suggesting that a strong, sustained driver for prices to breach new highs this year may be absent. Consequently, prices are anticipated to fluctuate within a wide band around a relatively high central range.
In terms of price trajectory, given that second-half copper price logic will likely center on macroeconomic trading themes, the overall trend is expected to be weaker initially before strengthening later. Specifically, the period from the end of the third quarter to the beginning of the fourth quarter may see prices exhibit some resilience, supported by the traditional peak consumption season and the window for potential policy support expectations in China.
Regarding price levels, the projected operating range for copper prices in the second half of 2026 is approximately $12,600 to $15,600 per tonne. The corresponding range for the main Shanghai copper futures contract is estimated to be around 96,000 to 120,000 yuan per tonne.
Strategic Recommendations
For trading strategies, a short-term, range-bound approach is recommended for directional positions. For medium to long-term positioning, the advised strategy is to accumulate on price dips. For arbitrage opportunities, focus should be placed on potential adjustments to U.S. copper import tariff policies.
Key Risk Factors
Several significant risks warrant attention. These include the potential outcomes of the U.S. Section 232 investigation into copper and related policy decisions, uncertainties surrounding the U.S. midterm elections, shifts in the monetary policy of the Federal Reserve, ongoing geopolitical conflicts, potential anti-"involution" policies within the copper industry, and the possible resumption of operations at the Panama copper mine.
Comments