
While this week’s spike in copper prices may have grabbed headlines, veteran mining executive Ernest Mast, based in Toronto, believes it signals something deeper: a market entering a structural phase shift, complicated by geopolitics, policy, and supply-side inertia.
Speaking to Investment Officer in the wake of former US president Donald Trump’s announcement of a 50 percent tariff on copper imports, Mast, president and managing director of Canada-based mining company Cygnus Metals, said the market surge was less about speculation and more about deepening fundamentals.
“The future structural deficit has been predicted for a few years now and as time moves on, the prediction looks more solid,” he said.
While the tariff shock reverberated across the Comex futures market in New York, Mast noted that the London Metals Exchange, regarded as the benchmark for most global copper trades, remained less affected. Still, the broader consequences for pricing and policy are only beginning to unfold.
Tariff logic under pressure
Mast sees the tariff move as counterproductive for US industry. “It will hurt US manufacturing and construction more than anyone else,” he said. “A few US copper projects and scrap recyclers will benefit, and there is a big potential benefit if the tariffs result in unblocking a number of projects that are currently stalled.”
The US import tariffs “will hurt US manufacturing and construction more than anyone else.”
The bigger problem, he argued, is that these US projects are not held back by economics, but by social and environmental opposition. “The tariffs make these projects more economic but is that enough for the projects to get over the line? he asked.
The United States, which imports nearly half of its copper, has long relied on Canada as a friendly supplier. But even here, the tariff’s ripple effects may hurt more than help. “Glencore has a large copper refinery in Montreal that produces copper cathode and its sales to the U.S. may be negatively impacted,” Mast noted.
While Canada exports little copper concentrate to the US, due to the absence of custom smelters there, the tariffs follow similar trade actions on aluminum, raising questions about North America’s integrated metals market. Mast said the bigger impact to Canada is the tariff on aluminum where there are a number of large smelters in Quebec and British Columbia that are now less competitive selling to the US.
No substitute for copper’s conductivity
Despite the geopolitical drama, Mast remains confident that copper’s status as a macroeconomic indicator is intact. “Copper is still a good indicator of construction and industrial activity,” he said. But the reliability of that signal is now clouded by the disconnect between fundamentals and policy. The real concern, Mast argues, lies in the lag between demand and supply.
“If demand increases quickly, there is no way supply can meet it and we may get a price spike.”
“It really depends on the copper price,” he said when asked if the market can meet the demands of electrification. At higher prices, mine expansions and project development can proceed. But lower prices, or political roadblocks, will result in shortages. “If demand increases quickly, there is no way supply can meet it and we may get a price spike.”
That warning aligns with views from other market analysts. ING recently noted that Comex inventories now exceed those on both the London and Shanghai exchanges combined, driven by panic buying ahead of the tariff. Once US stockpiles are drawn down, global prices could correct, but the long-term supply crunch remains.
Permits, politics and China’s lead
What keeps new mines from solving the supply bottleneck? According to Mast, the list is long: “Slow permitting times, legal opposition by special interest groups, and social opposition in many jurisdictions.”
While Western countries struggle to align political will with project approvals, China has raced ahead, especially in downstream smelting and refining. “There is no real need to expand that now,” he said, referring to global capacity, “but the issue could become that the western world does not have enough capacity to refine their copper needs, and China could restrict copper availability in the West, as it has done with rare earths.”
Turning point in copper’s global role
Reflecting on his three decades in the mining sector, Mast points to two defining moments in copper’s global role. The first was in the early 2000s, when China’s industrialisation tripled copper prices, setting off a mining boom in Chile and Peru. “At the same time, the Chinese built up their smelting and refining infrastructure ensuring there was no bottleneck on the processing side.”
“We may be entering a structural deficit if the EV, data center and renewable energy predictions are fulfilled.”
The second inflection point, Mast believes, may be happening now. “We may be entering a structural deficit if the EV, data center and renewable energy predictions are fulfilled,” he said.
With demand for copper forecast to double by 2035, copper’s geopolitical relevance is surging. Mast worries that if it becomes a strategic lever in trade disputes, as rare earths have, the price and availability of copper could face destabilising shocks.
Still, he rejects the idea that copper could be easily replaced. “Copper is still the premier metal for these types of applications based on its cost and physical properties,” he said. “I do not see a replacement material on the horizon except for very specialized applications where a much higher cost can be justified.”