Copper Hits $13,000 as a Hidden Industrial Crisis Grips Global Supply Chains
EBM Newsdesk Analysis
May 12, 2026 — Copper futures pushed above $6.40 per pound on the COMEX on Monday — a fresh record — even as London Metal Exchange warehouses hold 1.3 million tonnes of inventory and the International Copper Study Group has flipped its 2026 balance to a 96,000-tonne surplus. The trade is driven by China’s May-to-December sulfuric acid export ban removing roughly 3 million tonnes from the seaborne market, compounding shipment disruptions to Middle East sulfur flows through the Strait of Hormuz. Wood Mackenzie is blunt: the binding constraint on copper output is no longer geology — it is acid, refining charges, trade policy and fiscal risk.
For European industrial buyers — Aurubis, Glencore’s European smelters, the cable and transformer manufacturers serving Germany’s grid build-out — the implication is operational, not academic. Input costs are rising into a German economy already flagged for technical recession. Treasury desks should be modelling $7 copper, not arguing about whether to.
The acid bottleneck no model anticipated
Beijing announced in April that it would suspend sulfuric acid exports from May through at least December to protect domestic smelter feed economics. The policy strips approximately 3 million tonnes from the global seaborne acid market and lands hardest on Chile, where Chinese shipments had supplied around 37% of imports and where domestic supply from Codelco, Noracid and Anglo American covers near-term needs but loses visibility beyond mid-year. Spot acid prices have already doubled.
Sulfuric acid is non-substitutable for solvent-extraction-electrowinning operations, which produce roughly 15-20% of global refined copper. Chilean Q1 2026 production was already down 6% year-on-year before the acid disruption hit. Codelco has reported a 5% rise in production costs since March, attributable directly to the Middle East sulfur supply shock and Chinese export retention.
Why the surplus does not matter
The ICSG number — a 96,000-tonne surplus against a previously forecast 150,000-tonne deficit — should, on paper, be bearish. It is not. The surplus sits in the wrong places, in the wrong forms, on the wrong continents. US copper inventories are abundant under Section 232 protection. Stockpiles elsewhere have built on softer industrial demand, not on a structural easing of supply.
What clears the market is refined cathode at the smelter gate, and smelter economics are now governed by acid revenue and treatment-and-refining charges, both at extremes. Antofagasta’s mid-year benchmark negotiations with Chinese and Japanese smelters are unlikely to settle anywhere a model could have predicted six months ago.
The European demand floor
The bull case European corporates cannot ignore is structural. Hyperscaler data centre build-out in Frankfurt, Dublin and Madrid is locking in multi-year copper offtake. The EU Grid Action Plan requires €584 billion of network investment by 2030, of which copper is a non-substitutable input. Electrification of European auto manufacturing — even at the depressed BEV penetration rates Volkswagen is now forecasting — consumes roughly 80 kg per vehicle.
Money managers held 59,132 net long CME copper contracts at the start of May, the largest bull commitment since mid-January. Mining ETF assets under management have more than doubled year-on-year to $87.4 billion. The trade has consensus.
The Iran sensitivity
JPMorgan estimates that Brent at $110 for the remainder of 2026 strips 1.4 percentage points off global copper demand growth. With Brent at $106 on Monday and the Iran ceasefire on “massive life support”, the downside risk to the demand side is real — and partly offsetting the supply tightness driving prices. Copper has historically troughed 25% below its peak during major macroeconomic shocks. A second leg of the war prices that scenario in.
For now, the acid bottleneck wins. Smelters cannot conjure sulfuric acid out of a policy gap, and the war will not end through a single price print.
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