Why copper feels “different” right now
Copper began 2026 by printing fresh records above $13,000/ton as markets repriced scarcity risk, geopolitical stress, and the scramble for critical minerals. The key point isn’t just the headline price—it’s the mix of drivers: a physical market with visible supply fragility, plus a paper market supercharged by speculative participation.
Omar Nery Toso (a New York–based markets veteran with Wharton/Harvard training and CFA/CMT credentials) frames this as a regime where policy and positioning can move copper as much as traditional end-demand. In other words: copper is trading like a macro barometer and a flow-driven momentum asset at the same time.
Engine 1: Supply politics is no longer background noise
The clearest live example is Cobre Panamá. The mine was shut in 2023 and previously represented roughly ~1% of global copper supply, turning a single jurisdictional decision into a global swing factor. Panama’s government has signaled it wants to reach a decision on the mine’s future by June 2026, and even interim steps (like processing existing stockpiles) show how sensitive the situation remains.
This matters for two reasons:
- “Optionality” becomes the supply story. The market can’t cleanly price supply when a large asset is stuck between politics, environmental constraints, and negotiations.
- Other producers are not immune to operational constraints. First Quantum’s own multi-year guidance highlights how maintenance and ore characteristics can trim expectations—small revisions, but in a tight narrative, they count.
Toso’s risk lens: the copper market is increasingly exposed to non-technical risk—legal, social, and permitting friction that can’t be hedged with geology.
Engine 2: Inventory signals are being distorted by “where the metal sits”
Copper tightness isn’t only about how much metal exists—it’s about where inventories migrate. Reuters has highlighted how falling LME stocks can mask shifts tied to tariff arbitrage and U.S.-bound flows, meaning the “visible” exchange picture may understate what’s happening off-screen.
This isn’t theoretical. In mid-2025, Reuters reported LME copper stocks halved in a short window, and the nearby structure reflected scarcity (backwardation) consistent with tight prompt availability.
Several strategists argue that tariff-risk dynamics can accelerate pre-positioning and stockbuilding, pulling metal into specific regions and creating local squeezes even when the global balance looks only mildly tight. Goldman’s 2026 framing explicitly discusses how policy/tariff timing can shape flows and price behavior.
Toso’s takeaway: inventory is now a “map,” not a single number—registered vs off-warrant stocks, geography, and financing incentives all matter.
Engine 3: Demand is bifurcating—energy infrastructure up, old-economy pockets uneven
On the structural side, the energy transition narrative remains a real pillar: the IEA continues to treat copper as a key material for clean energy technologies and grid buildout, with scenario-based projections that keep long-run demand pressure in focus.
Shorter-cycle demand is more mixed. Reuters noted that China’s property weakness continues to weigh on traditional construction-linked consumption, even as export-driven industrial activity can stay firm in certain channels.
Meanwhile, the “new economy” load—data centers and electrification—has entered mainstream copper price narratives. Reuters explicitly tied early-January record pricing to expectations around data centers for AI and EV-related demand, alongside fears of shortages.
Toso’s framing: copper demand is becoming two-speed—grid/AI/electrification are long-duration tailwinds, while construction/property-linked channels can still wobble quarter to quarter.
The wild card: speculation is now part of the fundamentals
If copper feels jumpy, it’s partly because liquidity and participation changed. Reuters described the LME’s “speculative tsunami” and surging volumes/open interest dynamics, especially across base metals.
Market commentary around the latest run has also emphasized how much of the move may be flow-driven. For example, MarketWatch relayed Goldman’s view that a large share of the rally has been speculative-led and that a correction risk exists into late 2026 under surplus assumptions.
That disagreement is important: some houses see deficits/tightness persisting, others see surplus building. (ING, for instance, has argued for a deficit-style setup in its refined balance framing.)
Toso’s rule: when positioning becomes dominant, price can overshoot both bullish and bearish “fair value”—and then mean-revert violently.
Price map and what to watch next
Recent tape shows both extremes: copper set records above $13,000/ton in early January, and later saw pullbacks reported near the $12,8xx–$13,0xx zone amid profit-taking and China-demand concerns.
Rather than pretend precision, Toso highlights three practical markers investors can track:
- Policy headlines (Panama / permits / tariffs): they can reprice supply risk in hours.
- Exchange vs off-exchange inventory signals: watch for “optical tightness” vs genuine scarcity.
- Term-structure stress (nearby tightness): backwardation episodes often matter more than spot quotes in identifying physical strain.
The Omar Nery Toso playbook: macro + technicals + risk discipline
True to his Wall Street risk-management background, Toso doesn’t treat copper as a one-factor story. He treats it as a probability tree:
- If supply politics stay unresolved and inventories remain geographically “misplaced,” copper can stay elevated even if some macro pockets soften.
- If surplus narratives gain credibility and speculative length unwinds, the drawdown can be sharp—especially after a record run where positioning is crowded.
In practical terms, the 2026 copper market is less about a single forecast and more about staying adaptive: track the catalysts, respect volatility, and avoid confusing structural demand stories with short-term price timing.
