Copper prices hit record highs on AI demand and supply deficits
Copper prices have risen 50% since summer 2025, driven by AI infrastructure needs and growing supply deficits. Société Générale attributes half of the price increase to data center and grid electrification.
Copper prices have risen approximately 50% since summer 2025, reaching record levels with the London Metal Exchange price at approximately $14,500 per ton. Société Générale attributes half of the price increase to AI-driven demand for data centers, power grids, and electrification. UBS expects the supply deficit to grow from 219,000 tons this year to 379,000 tons next year. UBS forecasts a price of $15,500 next year, while Bank of America predicts $16,000.
El Niño weather patterns threaten copper production in the Democratic Republic of Congo and Zambia, where over 90% and 80% of electricity comes from hydropower, respectively. Société Générale anticipates stagnation in production growth rather than the market-expected increase of 200,000 tons from the DRC and 70,000 tons from Zambia. DJE Capital notes that copper faces physical limits in faster chips, with fiber optics gaining ground. The Wisdom Tree Copper ETC returned 31.6% in one year, while the BNPP Copper ETC returned 43.6%.