Copper’s long-anticipated supply crunch may not depend on what’s under the ground, but rather on what’s above it.
While industry warnings have focused on declining discoveries and the need for dozens of new mines, fresh analysis suggests that, at least in the U.S., raw copper supply is not the primary issue. Instead, the real bottleneck lies downstream, in smelting and refining capacity.
More Than Enough
A study by Benchmark Mineral Intelligence found the U.S. can meet 146% of its domestic copper demand from a combination of mine output, scrap, and overseas supply. That compares with just 40% for China, the world’s largest copper consumer, which must rely heavily on imported raw materials.
“The U.S. is producing more copper than it uses, and is far more self-reliant than China in terms of raw materials,” Benchmark analyst Albert Mackenzie said, according to the Financial Times. The U.S. problem, he added, was “downstream” because of its limited capacity to turn raw copper into the cathode used by manufacturers.
The price of copper has reflected rising concerns about supply and demand. London benchmark prices have climbed roughly 40% since October, hitting a record $14,000 earlier this year amid supply disruptions and expectations of strong future demand tied to electrification, data centers, and clean-energy technologies.
Mackenzie argues that even without overseas mining assets, the country would still be self-sufficient in raw materials thanks to domestic mines and scrap.
Expanding refining and scrap-processing capacity would do more to improve supply security than acquiring new mines abroad. Stockpiling raw material, or investing heavily in overseas assets, offers limited benefits if the metal still has to be processed elsewhere.
This stance challenges policy efforts that have prioritized upstream supply and strategic stockpiles.
Impact on Earnings
At the same time, copper’s rising price is starting to matter. The metal is increasingly viewed as the key profit driver for diversified miners, particularly as iron-ore markets soften.
Rio Tinto Plc’s (NYSE:RIO) latest annual results showed flat underlying earnings as weaker iron-ore prices weighed on its core business. The world’s largest iron ore producer earned $10.87 billion in 2025, below the $11.03 billion consensus.
But stronger copper prices, up 17% on average during the year, helped cushion the impact, alongside higher output from its operations. With the Glencore Plc (OTC:GLNCY) merger not happening, the miner will have to find other ways to boost its copper exposure.
Price Watch: Global X Copper Miners ETF (NYSE:COPX) is up 20.71% year-to-date.
Photo by Ziadi Lotfi via Shutterstock
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