Key Points

• Morgan Stanley expects the average copper price this quarter to be $14,800 per ton.
• Nearly 80% of the visible inventory is located in the United States.
• China shows a premium, indicating tightening supply outside of US warehouses

On November 2nd, copper prices rose above $14,250 per ton, due to Morgan Stanley's prediction that prices would continue to rise, and a warning that global inventories were becoming increasingly concentrated in the United States, while supply in other regions remained tight.

It is estimated that in the fourth quarter of 2026, the average copper price will reach $14,800 per ton, which is about 3.9% higher than the price of $14,251 per ton at the London Metal Exchange on Monday.

According to Dow Jones, currently about 80% of the world's visible copper inventory is stored in the United States. Despite this, which represents a considerable portion of the total global inventory, it still leads to regional shortages.

Why is copper supply still tight despite record inventories in the United States?

The issue of copper supply is increasingly not about the total quantity, but rather about where the inventory is located.

American warehouses have stockpiled large quantities of inventory, and traders are hoarding goods in advance before the potential introduction of import tariffs. This strategy has diverted supplies from markets that require immediate physical delivery.

Coinpaper This contradiction was previously discussed in a report about a US warehouse holding 700,000 tons of copper.

Reuters reported that the inventory of COMEX exceeded 726,000 tons in late October, while the actual import costs faced by Chinese buyers are getting higher and higher.

On October 28th, the premium for Yangshan copper rose to about $205 per ton, reaching a new high in over a decade.

This type of premium reflects the additional cost that buyers are willing to pay above the benchmark price to ensure physical delivery, indicating that Toutiao's inventory data may be masking regional shortages.

This round of increase has also caused the metal value of American nickel coins to exceed their face value.

Can copper prices break through $15,000 during the interruption in mining operations?

Limited supply doesn't only come from warehouse inventory.

Chile has experienced operational disruptions and weakened production, while Chinese smelters are undergoing maintenance, and the supply of scrap copper is limited, which also puts pressure on the supply of refined copper.

Institutions remain optimistic in their forecasts.

Goldman Sachs expects copper prices to reach $14,700 per ton by the end of the year and an average of $15,400 per ton in 2027. JPMorgan Chase separately predicts an average price of $14,800 per ton for the fourth quarter.

The expansion of artificial intelligence infrastructure provides another catalyst for demand, as data centers require a large amount of electrical equipment, wiring, and power connections.

Amazon's recent investment in AI demonstrates the scale of its infrastructure expenditures, however, these expenditures cannot directly measure copper consumption.

However, Morgan Stanley expects that as tariff uncertainties and potential production recoveries affect the market, prices will fall back to an average of $14,400 per ton at the beginning of 2027.

If U.S. import incentives reverse, the hoarded copper could also flow back into the international market.

At the same time, the recent selling of AI shares has also raised doubts about the sustainability of infrastructure spending.