What's Driving The High Copper Price?

Gold and silver prices reached record highs in 2025, as did copper, which reached $14500 per metric tonne on the London Metal Exchange in January this year.

This boom had a big impact on our industry, as copper is a key ingredient in the manufacture of wood preservatives. What is causing these high prices, and what does it mean for the timber treatment industry?

“The gold price has more than doubled over the past two years,” said Bertus. “Gold traded at about $1980 per ounce in January 2024; in January 2026, it hit $4320. As gold got more expensive, people started pouring money into silver – the so-called ‘poor man’s gold’. In January 2024, silver sold for $23 per ounce, while in January 2026, it more than quadrupled to pass $100. That’s phenomenal.”

Copper has been swept up in the turmoil. “But here’s where it gets interesting,” said Bertus.

“Copper is traded on the London Metal Exchange and on the COMEX division of the New York Mercantile Exchange. Normally, they follow each other, but when Donald Trump announced a tariff on copper imports to the US, people worried that copper prices there would rise. This caused a price gap between the two indices.”

‘When talk of tariffs started again, precious metal prices spiked once more.’

During the panic, US companies rushed to import copper to avoid the higher prices anticipated. “But then the tariffs weren’t implemented, which created a lopsided effect in the market. Copper prices moved closer to the LME price, giving some relief, but when talk of tariffs started again, precious metal prices spiked once more.”

However, global politics only partly explains changes in metals’ prices. Frank Blackmore, Lead Economist at KPMG South Africa, explained: “Gold and silver are safe haven assets, while copper is driven by industrial demand. Still, supply uncertainty can push copper higher.”

What shifts the balance between copper’s supply and demand? It could be anything from temporary mine closures, like those at Cobre Panamá and Freeport’s Grasberg mine in Indonesia, to shifts in Chinese industrial demand, such as the Lunar New Year slowdown in early 2026.

“It also doesn’t help that the world’s biggest mining companies have been discussing mergers,” said Bertus. “Rio Tinto and Glencore began merger talks, which could let them control the market. Prices depend on supply and demand, but big suppliers can easily cause a shortage.”

This merger was subsequently scrapped due to disagreement on valuations.

Blackmore forecasts that commodity prices will remain elevated for the foreseeable future. “As long as this level of global uncertainty persists or increases, we can expect the price of gold and silver to increase too,” he said. “Copper prices are less certain, but as the global economic growth slowly speeds up, so will the demand for copper – and potentially its price as a consequence.”

What advice does he have for businesses that use copper? “Take advantage of price corrections when looking to procure metals,” he said. “Also, consider using financial hedging products to limit your exposure to potential further large price rises.”

Bertus, on the other hand, thinks current copper prices cannot last.

“Commodity markets are doing phenomenally well as people lose trust in traditional safe-haven assets,” he said. “People are moving to physical, tangible assets to store value and protect against inflation. I’m not a commodities trader myself, but I do think that a lot of the speculation that’s priced into the market right now is not founded on reality and is unsustainable.”

Commodity prices are also heavily dependent on the strength of the US dollar. A lot is being said about “debasement trades”, which expect the US government to devalue its dollar. This diminishes trust, or is perceived to diminish trust, in the previous safe haven.

Much will depend on the movement of the US dollar. Unfortunately, this would also mean that the Rand’s strengthening will be reversed. As predicted by Nedbank, the Rand is trading near the second standard deviation, which historically has proven an indicator of imminent depreciation in the currency.

“The copper price will, ultimately, have an impact on the price of Dolphin Bay’s copper-based products, CCA and ACQ,” Bertus concluded. “We will keep on keeping our customers informed in that regard. I believe a market correction will happen. And I certainly hope that it will.

“We are just not sure when this will be, leaving us exposed for the moment to higher prices.”

Source: Dolphin Bay