Copper: the shortage arriving via Hormuz and El…

Copper is no longer merely China’s industrial thermometer. It has become the metal of electrification, data centres, grids and the geopolitics of inputs. As of 26 June, the London Metal Exchange showed three-month copper at $13,649 a tonne, day-delayed closing price, and recalled that its contract is the world benchmark for physical copper. That is very high. But the important point is not only the price: it is the quality of the shock.

The market does not yet tell a simple story of a refined-copper shortage. The June ICSG figures even say the opposite on the surface: over January-April 2026, world refined production reaches 9.711 million tonnes, refined consumption 9.471 million, an apparent surplus of 239,000 tonnes. But beneath this surface, the mine is stalling: world mine production falls from 7.551 to 7.446 million tonnes, -1.4% year on year, while the mine capacity utilisation rate slips to 76.6%. In other words, refined output is still holding thanks to inventories, recycling, China and transmission lags. The mine, for its part, is already sending a tighter signal.

The weak link: acid, not just ore

The Hormuz crisis changes the reading. UNCTAD recalls that the strait concentrates about a quarter of world seaborne oil trade and significant volumes of LNG and fertiliser. For copper, the most insidious transmission channel runs through sulphur and sulphuric acid. The WSJ documented in April the surge in sulphuric acid, from $150 to $800 a tonne in some flows, and the strait’s role in sulphur exports.

Why does this matter? Because part of copper is extracted by leaching, then electrolysis, a process called SX-EW. It consumes sulphuric acid to dissolve the copper contained in oxide ores. When Gulf sulphur is blocked, it is not only oil that is missing. It is an industrial reagent without which some copper volumes become more expensive, slower, even temporarily unprofitable.

El Niño adds weather risk

Second layer: climate. On 11 June, NOAA’s Climate Prediction Center placed ENSO under an El Niño Advisory. Its summary is clear: El Niño is present, is expected to strengthen through the Northern Hemisphere winter of 2026-2027, and NOAA gives a 63% probability of a very strong episode in November-January. This figure does not prove a production rupture. It says the tail risk is thickening.

The link with copper runs through geography. According to the USGS, Chile produced 5.3 million tonnes of mine copper in 2025, Peru 2.7 million, the DRC 3.2 million. Chile and Peru therefore concentrate a major fraction of world mine supply. And El Niño can raise the risk of extreme rainfall, landslides, slowed ports and regional water constraints on the South American Pacific coast. The right phrasing is not “El Niño will close the mines”. The right phrasing is: when the mine is already running at 76.6% of capacity, each weather incident matters more.

Rigid demand, limited substitution

On the demand side, copper remains hard to replace in power grids, transformers, motors, data centres, vehicles and construction. The IEA already places it at the heart of the energy transition and electrical infrastructure. The WSJ noted in late 2025 that electrification, renewables, electric vehicles and data centres were supporting the price even as mining accidents reduced the supply cushion. The WSJ of 26 June also reports that Maybank raised its long-term copper assumption to $9,260 a tonne, a sign that high prices are no longer treated as a mere spike.

One must nonetheless stay cool. The ICSG does not yet show a world refined deficit over the first four months of 2026. End-of-period refined copper stocks rise to 2.108 million tonnes in April, against 1.373 million a year earlier. The real stress is therefore less in the instantaneous accounting balance than in the stacking of fragilities: falling mine output, more expensive acid, Hormuz freight, El Niño risk, rigid electrical demand.

The working scenario

My central scenario: copper stays expensive as long as the market lacks proof that the Hormuz normalisation holds, that sulphuric acid becomes available again and that the El Niño episode does not disrupt Andean production during the austral summer. The level of $13,649 a tonne already prices in a lot of stress. But a real shock to SX-EW or to Chilean and Peruvian ports would force the market to reprice physical scarcity, not only the long electrification story.

The signal to watch is therefore not only the LME price. One must look at concentrate treatment charges, LME and COMEX inventories, sulphuric-acid prices, NOAA ENSO bulletins, and the operational announcements of the major producers. For the price dashboard, our guide on reading the copper market remains the entry point. For the geopolitical shock, the logical thread starts from the situation report on Hormuz and the normalisation of the strait.

Conclusion: copper is not yet in a documented world shortage. It is in a phase of credible pre-shortage. And in a metal where supply takes ten years to arrive, that nuance is exactly the one the market prices before the official statistics.

Sources: LME Copper, ICSG Copper Bulletin, June 2026, Table 1, USGS Mineral Commodity Summaries 2026, Copper, NOAA CPC ENSO Diagnostic Discussion, 11 June 2026, UNCTAD, Strait of Hormuz disruptions, IEA Global Critical Minerals Outlook 2025, WSJ, An Acid Test for the Global Economy, WSJ, Copper Price Forecast to Rise as Supply Cushion Dwindles, WSJ Basic Materials Roundup, 26 June 2026. Market data accessed 26 June 2026. This is not investment advice.