Copper prices plummet, hard to stop? The three major Wall Street investment banks forecast diverging trends by 2026

Last mid-month, the London copper market experienced a rollercoaster. On January 14, it hit a record high of $13,403 per ton, but within just two days, copper prices sharply retreated to $12,770 per ton. Behind this sharp decline, there is a deep divergence among international investment banks regarding the outlook for the future. Regarding whether new highs can be reached again by 2026, Goldman Sachs, Citibank, and UBS have given very different answers.

Short-term signals of pressure emerge; has the market turning point arrived?

Copper prices face short-term correction risks, which has become a market consensus. Over the past year, copper prices have surged by as much as 40%, creating an astonishing rally. Multiple factors support this trend: frequent copper mine accidents worldwide leading to tight supply, market expectations that the US may impose tariffs on imported refined copper, and strong demand from emerging sectors like AI data centers. However, these positive factors also sow the seeds of over-optimism.

Changes in information flow are beginning to reverse market sentiment. US President Trump announced a temporary suspension of tariffs on rare earths and other critical minerals, easing previous market tensions. More notably, tech giant NVIDIA revised data in a technical paper—reducing the estimated copper busbar usage per gigawatt rack in data centers from 500,000 tons to just 200 tons. Although this appears to be a technical adjustment, it directly punctures the market’s over-optimistic expectations for AI copper demand.

Divergence on Wall Street intensifies; three outlooks each have their rationale

Investment banks’ outlooks on copper prices show a typical “bearish,” “neutral,” and “bullish” split.

Goldman Sachs’ pessimistic forecast: This bank believes the current copper rally has essentially peaked, with significant downside risks. Its core logic is that the recent surge was mainly driven by excessive US stockpiling. Once tariff policies in Q2 are clarified—whether delayed or implemented—the incentive to stockpile will vanish. Goldman predicts that the average LME copper price in the first half of 2026 will be around $12,750 per ton, with a more pessimistic outlook for the second half—copper prices could fall to $11,200 per ton in Q4, implying a substantial downward correction in the latter half of the year.

Citibank’s moderate outlook: While raising its short-term target to $14,000 per ton, Citibank also makes a key judgment—that January could be the peak price for 2026. The logic is that once copper exceeds $13,000, it will trigger a surge in scrap copper supply, balancing the market. Citibank forecasts that the average copper price from Q2 to Q4 2026 will stabilize around $13,000 per ton, suggesting that after a short-term high, a long-term plateau will form.

UBS’s optimistic stance: UBS acknowledges that copper prices may face consolidation in the short term, but remains most optimistic—believing 2026 will be the year when the market truly experiences physical shortages. Its core argument is that mining capital efficiency has significantly declined, leading to a severe shortage in copper supply during 2026-2027. Supported by declining inventories, copper prices are expected to rise further and break new highs.

The real turning point: supply-side crisis and demand-side variables

To understand these divergences, one must look at the dynamic changes on both supply and demand sides.

Supply side: S&P Global’s latest research indicates that the AI race and increased defense spending will exacerbate global copper shortages. By 2040, global copper demand is projected to grow by 50%. This long-term forecast strongly supports UBS’s bullish view— as emerging sectors (humanoid robots, high-end manufacturing, defense applications) continue to increase copper demand, the declining efficiency of traditional mining investments will become more pronounced.

Demand side: Adjustments in AI data center copper demand (NVIDIA’s data revision) have reduced short-term copper price support, but long-term diversified demand has increased copper’s strategic importance. This explains why, despite short-term disagreements, all institutions agree on copper’s long-term strategic role.

The 2026 copper price trajectory will depend on when stockpiling cycles end, how tariffs are ultimately implemented, and whether actual supply shortages are as severe as expected. Wall Street’s divergence essentially reflects significant differences in estimates of these variables. For investors, short-term downward pressure on copper prices is real, but in the long run, structural supply shortages could become a key factor supporting higher prices.