Copper Price Hits a Record $6.83 as AI Demand and Supply Shortages Fuel the Rally

Key Takeaways

• Copper reached an all-time high near $6.83 per pound after rising for six consecutive sessions.
• Global mine production declined during the first half of 2026, while falling ore grades and operational disruptions are limiting supply growth.
• AI data centers, electricity grids, electric vehicles and renewable-energy projects are creating a structural increase in copper demand.
• US tariffs and the possibility of additional restrictions on refined copper have encouraged stockpiling in American warehouses, reducing supplies elsewhere.
• Freeport-McMoRan, Southern Copper and BHP rose as investors increased exposure to companies that could benefit from record copper prices.

Copper prices climbed to a record high on Wednesday as tightening mine supply, accelerating demand from artificial intelligence infrastructure and US tariff policies created an increasingly severe struggle for available metal.

Benchmark copper touched an all-time high of approximately $6.83 per pound, while the most-active Comex contract traded as high as roughly $6.86. The metal has gained close to 49% over the past 12 months and is on course for one of its strongest annual performances in decades.

The latest advance extended copper’s winning streak to six sessions, its longest since April 2025. Unlike earlier rallies driven largely by expectations surrounding electric vehicles and renewable energy, the current move is also being supported by the rapid expansion of power-hungry AI data centers.

Why Is the Copper Price Rising?

Copper’s record rally reflects the convergence of three major forces: restricted mine supply, accelerating electricity demand and trade policies that have distorted the location of global inventories.

Copper is required throughout the electricity system. It is used in power cables, transformers, substations, cooling equipment, renewable-energy facilities, electric vehicles and data centers. The metal’s high electrical conductivity makes it difficult to replace in applications where efficiency and reliability are essential.

AI infrastructure has added another source of demand. Training and operating advanced models requires large computing facilities, but the servers themselves represent only part of the copper requirement. Data centers also need high-capacity connections to electricity grids, backup power systems, cooling equipment and extensive internal wiring.

At the same time, miners have struggled to increase production. New copper mines can require more than a decade to receive permits, secure financing and begin commercial operation. Existing deposits are also becoming more difficult and expensive to exploit as ore grades decline.

The most-active copper contract rose approximately 1.4% to $6.86 per pound during the latest session, supported by global supply concerns, US stockpiling and demand linked to AI and electricity infrastructure.

Global Copper Mine Supply Is Falling Behind

The immediate shortage is being intensified by weaker mine production.

Global mined copper output declined approximately 1.1% year over year during the first half of 2026, according to International Copper Study Group data cited by market analysts. Major producers in Chile, Indonesia and the Democratic Republic of Congo have faced a combination of lower ore grades, operational problems, severe weather and project delays.

Sprott Asset Management has warned that global copper mine supply could record its first annual decline since 2017.

Chile, the world’s largest copper-producing country, recorded its weakest second-quarter output in at least 19 years and reduced its annual production forecast. Codelco, the state-controlled mining company, has struggled with aging operations, project delays and declining mineral quality.

BHP also reported that annual copper production fell 3% to 1.95 million tonnes. The company expects output to decline again during its current fiscal year, partly because of falling ore grades at the Escondida mine in Chile, the world’s largest copper operation.

Freeport-McMoRan has faced a slower-than-expected recovery at its Grasberg complex in Indonesia following a major underground incident in 2025. Other disruptions in Indonesia and the Democratic Republic of Congo have further reduced the amount of copper expected to reach the market.

Higher prices can eventually encourage new production, but the industry cannot respond quickly. Developing a large mine frequently requires 15 years or more, while environmental reviews, community negotiations and infrastructure construction can extend that timeline.

AI Data Centers Are Becoming a Major Source of Copper Demand

The AI investment boom is changing long-term projections for the copper market.

S&P Global estimates that copper demand from data centers, including facilities supporting AI and robotics, could rise from approximately 1.1 million tonnes in 2025 to 2.5 million tonnes by 2040.

Total global copper demand could reach 42 million tonnes annually by 2040, compared with approximately 28 million tonnes in 2025. Without a meaningful expansion of mining and recycling, the market could face a supply deficit of 10 million tonnes, equivalent to almost one-third of current consumption. S&P Global

AI facilities require copper for more than computer hardware. Hyperscale data centers need additional transmission lines, transformers, switchgear, cooling systems and backup power infrastructure. The construction of those facilities can also require regional electricity-grid upgrades, multiplying their indirect metal consumption.

The demand extends beyond AI. Electric vehicles require substantially more copper than traditional combustion-engine vehicles, while wind and solar projects need large amounts of wiring and grid connections. Governments are also increasing defense spending, adding demand for electronics, communications systems and military equipment.

BHP previously estimated that data centers could account for 6% to 7% of global copper consumption by 2050, compared with less than 1% today.

US Tariffs Are Redirecting Copper Inventories

Trade policy is adding a short-term catalyst to the longer-term supply shortage.

The United States has imposed Section 232 tariffs on numerous copper products as part of a broader effort to encourage domestic mining, smelting and manufacturing. Some products made almost entirely from copper face duties of up to 50%, while certain derivative and industrial products are taxed at lower rates. White House tariff fact sheet

Refined copper has remained under review, creating uncertainty over whether the most widely traded form of the metal could face additional duties.

Traders have responded by moving large quantities of copper into US warehouses. Approximately 200,000 tonnes of refined metal reportedly entered the country in July, the largest monthly inflow on record, while Comex inventories climbed above one million tonnes.

This does not necessarily mean the world lacks copper in absolute terms. Instead, a growing share of available inventories has become concentrated in the United States, leaving European and Asian markets with less immediately deliverable supply.

The divergence has contributed to rising prices on both the Comex and London Metal Exchange. Three-month LME copper previously reached a record above $14,700 per tonne, while US futures have continued setting new highs.

Further clarification on tariffs could produce significant volatility. New duties on refined copper could extend US stockpiling, while an exemption or delay could cause some of the tariff premium in Comex prices to unwind.

China’s Copper Demand Shows Signs of Improvement

China remains the world’s largest copper consumer, making its manufacturing and construction outlook essential to the market.

The country’s property slowdown has weighed on traditional copper demand, but spending on renewable energy, electricity networks, electric vehicles and technology infrastructure has provided an offset.

The Yangshan copper premium, which measures the amount Chinese buyers are willing to pay above international benchmark prices, recently rose to approximately $121 per tonne, its highest level since November 2022. A rising premium generally indicates stronger import demand and tighter supplies inside China.

Alibaba’s plan to expand its global data-center capacity to more than 20 gigawatts by 2032 further demonstrates the potential scale of China’s AI-related electricity and metals requirements.

However, China remains a source of risk as well as demand. A sharper economic slowdown, weaker industrial production or reduced infrastructure investment could limit copper consumption and trigger profit-taking after the metal’s rapid advance.

Copper Mining Stocks Rise With the Metal

Record copper prices have boosted shares of major mining companies.

Freeport-McMoRan gained approximately 3.1% to $74.35 during Tuesday’s trading session, while Southern Copper rose 4.1% to $206.14. BHP advanced about 2% to $87.83, and Rio Tinto gained approximately 0.5%.

Freeport-McMoRan, Southern Copper and Teck Resources have each risen by roughly 40% or more in 2026, reflecting expectations that higher selling prices will generate stronger cash flow even when production volumes are constrained.

Freeport is particularly sensitive to changes in copper prices. The company estimates that every 10-cent movement in the average copper price can affect annual earnings before interest, taxes, depreciation and amortization by approximately $390 million.

Mining stocks do not provide identical exposure to copper itself. Production costs, project delays, taxes, currency movements and operational disruptions can prevent producers from realizing the full benefit of rising commodity prices.

The current rally nevertheless improves the economic case for mine expansions and lower-grade deposits that would be less attractive at lower prices.

Can Copper Reach $7 per Pound?

Copper’s move above $6.80 brings the psychological $7 level into focus.

A sustained break above that threshold would depend on continued inventory tightening, additional supply disruptions or confirmation that US tariffs will extend to refined copper. Stronger Chinese demand and further AI infrastructure announcements could provide additional support.

However, the rally has become increasingly vulnerable to a correction. Copper has risen sharply over a short period, while high prices are encouraging manufacturers to reduce usage or substitute aluminum in less demanding applications.

A stronger US dollar, slower global manufacturing activity or improved mine supply could also trigger profit-taking. Any decision that reduces US tariff uncertainty may narrow the premium embedded in Comex futures.

Despite those short-term risks, the longer-term supply challenge remains unresolved. S&P Global estimates that mined production would need to increase from approximately 23 million tonnes in 2025 to at least 32 million tonnes by 2040, even after assuming substantial growth in recycled supply.

Copper’s record at $6.83 is therefore not based solely on speculative demand. It reflects an increasingly visible conflict between the rapid expansion of electricity-intensive industries and a mining sector that cannot increase production at the same speed.