Deutsche Bank is out with a highly-aggressive copper call, arguing that the market is moving from a traditional supply-and-demand story into something closer to an inventory/liquidity squeeze.
Their target is eye-catching: $22,050 per tonne, or roughly $10/lb, by Q2 2027, nearly 50% above current levels.
“We expect copper to face acute scarcity over the coming months as unencumbered inventories shrink to critical levels,” DB writes. “Demand destruction appears to be the most likely rebalancing mechanism, requiring prices to reach a level at which demand is destroyed sufficiently quickly.”
The bank argues that headline copper inventories badly overstate how much metal is actually available to the global market.
China has accumulated an estimated 2.05 million tonnes in strategic reserves, while US inventories have ballooned because the persistent threat of tariffs has made it profitable to ship copper into the US. Deutsche Bank estimates the US could have effectively locked up 1.3 million tonnes by year-end.
Put the two together and they estimate 71% of global above-ground copper inventories will be “encumbered” by the end of 2026. Their measure of genuinely free-floating inventories is already at the lowest level in the data going back to 1984.
That’s the heart of the thesis.
In terms of the curve, normally a shortage shows up through backwardation — the nearby price rises relative to later contracts. Here is a look at the US curve today:
Deutsche Bank thinks the backwardation mechanism is breaking down. US tariff fears have kept CME copper expensive relative to LME, sucking metal into the US. Once it gets there, however, the reverse trade isn’t nearly as easy as the metal can enter the US much more easily than it can leave.
That’s important because it means an extreme shortage outside the US might not produce the kind of LME backwardation that traders would normally expect. Deutsche Bank argues that the adjustment may instead have to take place through the outright copper price.
Inventories:
In terms of price, they forecast a rise to $20,900 per tonne next year and $18,500 in 2028 from $14,500 now.
They note that usual metrics of inventories are rising but that’s run headlong into stockpiling, which may be worsening. They note that In February 2026, the ChinaNonferrous Metals Industry Association called for an expansion of strategic copper reserves. In the US, it’s more the private sector doing the work because of the threat of tariffs from Trump. They argue that metal won’t seep back out into global markets because the threat isn’t going away any time soon. In June 2025, the Secretary of Commerce recommended a phased universal tariff on refined copper of 15% starting in 2027 and 30% starting in 2028. There is some talk it could be recinded by Trump but the market isn’t acting that way.
All told, they see a massive rally from here, something I’ve been writing about for years.
This article was written by Adam Button at investinglive.com.