Copper’s wild ride isn’t over. After the July tariff exemption sent prices tumbling, contractors and wholesalers alike thought the worst was behind them. But as of late December 2025, copper is spiraling to record new highs – topping $12,000 per ton on global exchanges as the HVAC sector braces for fresh supply headaches and price hikes.
Ongoing disruptions at major South American mines, domestic hoarding, heightened demand from electrification – as well as a flurry of U.S. import tariffs – have kept inventories at multi-year lows, triggering a late-year rally. Here’s the quick timeline:
- July 2025: President Trump exempts refined copper from tariffs, sparking a massive inventory sell-off and a price plunge of nearly 20%. Contractors who stockpiled copper were left with costly excess, while fabricated copper products (pipes, tubes, wires) faced continued tariff pressure and volatility.
- Second half of 2025: The market changes fast. Mine disruptions in Latin America and Africa (the lifeblood of global supply) choke available stock, while renewed U.S. infrastructure, grid spending, and global data center boom push demand skyward, according to Reuters.
- Late December 2025: Prices blast through $12,000 per ton – the highest on record – putting nearly everything with copper components on the verge of another sharp price hike. Manufacturers across the board announce mid-single-digit to double-digit increases on HVAC units for Q1 2026, according to ACHR News.
Why Did It Happen?
- Supply is Tight: Massive supply disruptions in Chile and Peru, the world’s top copper producers, collided with increasingly strict permit timelines – making new mines in safer jurisdictions months or years from reality.
- Tariff Whiplash: The earlier exemption applied only to copper in its pure form. Fabricated copper – line sets, tubing, electrical wire – remain under steep tariffs. That’s left the HVAC sector exposed to ongoing premium pricing for exactly the products contractors need.
- Booming Demand: Major U.S. infrastructure investments, a wave of new data centers, and electrification all require copper. The HVAC sector, with its deep reliance on copper coils and wiring, is getting squeezed between surging consumption and supply that simply can’t keep up.
- Substitution’s Limits: While alternatives like aluminum and nickel-coated steel are more common than ever, the substitution effect’s impact is limited. Aluminum has also been subjected to high tariff-induced price hikes just the same, and has lower conductivity to boot.
What Contractors Are Seeing on the Ground
HVAC manufacturers and suppliers rolled out a barrage of price updates in Q4 of 2025 – with most increases in the mid-single digits, but some key categories seeing double-digit hikes. Copper-linked lines and tariff-exposed products were cited across the board as major culprits driving these changes.
Refco introduced price increases ranging from 4-18%, explicitly noting tariff impact by country of origin. ADP, a major supplier of copper coils and air handlers, implemented up to a 6% increase on September 15. Throughout the month, “various impacts [were] reported across the chain,” and on September 29, Legend Valve imposed a price hike of up to 25% in select categories. See the full list in the last industry round-up on ACHR News.
Wall Street Braces for “Copper Hoarding” and Record Price Forecasts
Bloomberg and Citi analysts report that the latest copper price rally isn’t just about mine disruptions and tariffs –
rampant “hoarding” in the U.S., triggered by arbitrage on high local prices, is also draining global inventories. U.S. refined copper inflows have surged by about 650,000 tons in 2025, with inventories ballooning to 750,000 tons as traders pull supply from international markets. Nearly 40% of the London Metal Exchange’s copper stocks are now marked for physical delivery, pushing LME inventories down to just 165,000 tons –
about 40% lower than the start of the year, according to StoneX’s Natalie Scott-Gray.
Citi and other brokerages now expect copper to hit $13,000-$15,000 per ton in 2026, with “stratospheric new highs” possible if mine disruptions persist and U.S. stockpiling continues. Analyst Andrew Glass (Avatar Commodities) calls the current surge a “highly irregular distortion,” with tariff anticipation – rather than traditional supply/demand swings – at its core. ING’s Ewa Manthey warns these historic prices will squeeze industrial margins, while Deutsche Bank forecasts ongoing deficits through at least Q1 2026 as major miners slash output projections.
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