AI Demand, Supply Concerns Boost Base Metal Prices
Base metal prices rose in July due to strong demand from the artificial intelligence (AI) sector, supply concerns, and a weakening US dollar. Copper prices jumped 4.7% per pound as worries about meeting rising demand from AI led to concerns that current and planned mining projects may not be enough.
The South Korea-Chile cooperation on critical minerals supported demand, with the two countries signing five agreements on lithium and copper in July. The agreements included full value chain partnerships, information exchange, and technological cooperation.
China's strong aluminum exports also highlighted global demand for the metal, which rose 2.5% per pound amid tensions in the Middle East and low inventory levels. Indonesia's new controls on rare earth elements (REEs), uranium, and tin disrupted aluminum shipments from the country.
Nickel prices increased 5.2% per pound as concerns over trading costs for the metal grew following reports that the US plans to impose a 12.5% tariff on imports from 60 countries.
Zinc prices also rose 2.5% per pound due to low inventories and supply risks, while aluminum and copper prices have been rising since January 2025 amid supply constraints, with copper testing record highs according to the International Energy Agency (IEA).