Copper Price Forecast: Aluminum Substitution and Tariff Risk Test Record Rally
By Muhammad Umair | Published: Jul 06, 2026
Key Points
- Copper prices remain bullish as long as they hold above $5.20.
- High prices are increasing the risk of aluminum substitution.
- U.S. tariff uncertainty may keep copper prices volatile.
Market Overview
Copper (XCU) prices are currently near record levels following a strong rally in 2026. However, the market is entering a more challenging phase. The long-term trend for copper remains bullish, provided that prices stay above the critical threshold of $5.20 per pound.
Short-Term Volatility Factors
Despite the bullish long-term outlook, several factors may contribute to short-term volatility in copper prices:
- Aluminum Substitution: As copper prices rise, there is an increasing risk that industries may substitute aluminum for copper in various applications, which could impact demand for copper.
- U.S. Tariff Uncertainty: Ongoing uncertainties regarding tariffs in the U.S. could lead to fluctuations in copper prices, as tariffs can affect import costs and overall market dynamics.
Price Levels to Watch
The article discusses key price levels that traders should monitor. The critical support level is $5.20, while a breakout above $6.70 could signal further bullish momentum. The interplay of macroeconomic factors, substitution risks, and tariff implications will be crucial in determining the future trajectory of copper prices.