Copper prices experienced a notable rebound after Federal Reserve Chair Jerome Powell hinted at potential interest rate cuts this month. Industry professionals have expressed optimism that copper could reach $12,000 per ton, following days of volatile trading driven by geopolitical tensions.

Powell's remarks provided significant support, with LME copper futures climbing 1.26% to $10,725.05 per ton at the time of reporting. During Tuesday's speech, Powell indicated the Fed could implement another 25 basis point rate cut later this month, despite government shutdown concerns affecting economic assessments. He repeatedly referenced slow hiring trends and warned of potential further deterioration in employment conditions.

Copper prices have been bolstered by Federal Reserve rate cut expectations and major global mine production disruptions in recent months. The most significant incident occurred when mining giant Freeport-McMoRan temporarily suspended operations at Indonesia's Grasberg mine following a landslide on September 8th. The company declared force majeure and expects substantial production impacts continuing through 2027. Freeport-McMoRan has reduced its 2026 Grasberg production guidance by 35%, representing approximately 270,000 tons of lost copper supply.

The year 2025 has witnessed unprecedented challenges at the world's largest copper mines. In late May, the world's fourth-largest copper mine, Kamoa-Kakula in the Democratic Republic of Congo, experienced seismic activity that forced a reduction in 2025 production guidance from 520,000-580,000 tons to 370,000-420,000 tons. In late July, Chile's El Teniente mine, the world's largest underground copper operation, suffered mine shaft collapse due to earthquakes. Chile's state-owned copper company reported a 300,000-ton production reduction for this year, approximately 11% below previous expectations.

These supply disruptions have not only reduced copper output but highlighted the enormous challenges mining companies face in meeting growing demand. Last week, copper prices surged to their highest levels since May 2024.

During LME Week in London, Kenny Ives, head of trading at Chinese mining giant CMOC's trading division, suggested copper prices could reach $11,000 or even $12,000 per ton by year-end. Nick Snowdon, Head of Metals Research at Mercuria Energy Group, speaking at the same event, noted that reaching these elevated levels would be "relatively easy" given severe supply disruptions and continuous investment flows into commodities, particularly metals markets. Such price levels would establish new historical records, surpassing copper's previous peak of $11,104.50 per ton achieved in May 2024.

However, more cautious perspectives emerged from the same conference. Goldman Sachs analyst Eoin Dinsmore stated that global copper markets remain in surplus, with balance expected to return next year. Notably, Dinsmore indicated in a recent report that copper prices are resetting into an entirely new trading range. Structural supply constraints, robust demand from critical sectors including power grids, artificial intelligence, and defense, combined with potential strategic reserve activities, have established a new price floor at $10,000 per ton.

For investors, this suggests extremely limited downside risk for copper prices, with $10,000 representing a solid "new baseline." However, due to current minor market surplus conditions and high prices triggering increased scrap copper supply and aluminum substitution effects, copper's upside potential faces a clear $11,000 "ceiling" over the next two years.