Frank Talk: Copper supply faces first annual decline since 2017

Copper’s record-breaking rally is often attributed to the prospect of U.S. tariffs, but Frank Holmes, chief investment officer of U.S. Global Investors (NASDAQ:GROW) , argues the market is signaling a deeper structural problem. In this op-ed , Holmes examines weakening global mine output, a decades-long decline in major copper discoveries and the growing difficulty of bringing new deposits into production. With demand set to rise alongside the expansion of AI data centers and electricity infrastructure, he argues that copper’s supply constraints, rather than tariff speculation, may be the more important force behind the metal’s advance. Copper set another record this week. Three-month metal on the London Metal Exchange (LME) touched $14,779 a ton on Tuesday, while New York futures crossed $3.74 a pound. The red metal is up roughly 24% this year and about 51% over the past 12 months, beating Magnificent 7 stocks. Ask around and you’ll probably hear the same explanation for why this is happening: tariffs. The Commerce Department has proposed a 15% duty on refined copper imports beginning in 2027, rising to 30% in 2028, though the administration has neither confirmed nor ruled it out. The story goes that traders are racing metal into U.S. warehouses ahead of the deadline. July imports did hit a record 225,094 tons. It makes sense on paper, but I no longer think it’s the right explanation. When traders genuinely expect a tariff, New York has to trade at a premiu...