While Thursday saw the broadest market selloff of 2026 so far, copper has surged. Orange metal rallied to an all-time high, touching $14,268 a metric ton on the London Metal Exchange.
Yet the blistering price action may do little to smooth the path for what could be the mining industry’s biggest-ever deal, a $200 billion merger between Rio Tinto Plc (NYSE:RIO) and Glencore Plc (OTC:GLCNF).
The Rally Drivers
A weaker U.S. dollar, speculative momentum, and a narrative around copper’s central role in the technology transition all contributed to strong momentum. Since most commodities trade in U.S. dollars, the dollar slide has amplified gains across metals. Meanwhile, electrification, AI, defense spending, and data center expansion are all copper-intensive.
But copper’s surge is no longer a simple proxy for near-term economic health. Often dubbed “Dr Copper” for its ability to diagnose the global cycle, the metal has decoupled from that old paradigm.
Superb performance became less about momentary demand and more about forward-looking scarcity. Prolonged underinvestment, declining ore grades, and regulatory constraints have all made new mine supply harder to find and harder to deliver.
Structural Issues
That structural story sits awkwardly with Glencore’s latest production performance. The miner noted its copper output fell 11% in 2025 to 851,600 tons. It hit the low end of guidance as weaker ore grades and operational constraints weighed on volumes.
Although production rebounded in the final quarter, the underlying problem remains. For 2026, Glencore expects output of 810,000 to 870,000 tons, owing to issues at the Collahuasi mine in Chile. The midpoint of that range is well below a previous forecast of 930,000 tons.
That reality complicates the potential mega-merger. Investors view copper as the core rationale for any tie-up, yet soaring prices do not automatically translate into near-term production growth. Copper is a prized asset at the moment, but it is not easily expandable.
Self-Reinforcing Volatility
Meanwhile, extreme prices are bringing along extreme volatility. Physical demand, particularly in China, has already shown signs of strain at elevated levels, and parts of the market are thinning as risk limits are hit.
“When things go exponential, a lot of the banks start to withdraw due to their risk tolerance,” Dan Smith, managing director at Commodity Market Analytics, said, according to Reuters.
“The volatility just makes it brutal to try and trade it,” he added, explaining that this dynamic creates a narrower market participation. Thus, it has the potential to self-reinforce, since smaller volume increases volatility potential.
Global X Copper Miners ETF (NYSE:COPX) is up 31.26% year-to-date.
RIO Price Action: Rio Tinto shares were down 2.61% at $92.65 during premarket trading on Friday. The stock is approaching its 52-week high of $97.11, according to Benzinga Pro data.
Photo via Shutterstock
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