Copper Boom: AI Trade Drives Up Demand for Strategic Metal
The AI trade is driving up demand for copper, and miners who can increase production without sacrificing profitability are poised to benefit. According to Bank of America, copper has become the industry's 'new center of gravity' due to its widespread use in data centers, electric vehicles, and power generation infrastructure.
Copper prices have risen 45% over the past year to around $6.50 a pound, and Bank of America forecasts deficits in both 2026 and 2027. The bank's analysts are focused on identifying miners who can grow copper production at acceptable capital intensity and execution risk.
The four miners that Bank of America rates as Buy, Glencore, Freeport-McMoRan, Antofagasta, and South32 Ltd., offer varying levels of exposure to copper growth. Freeport is seen as a clean way into the US-listed market, with adjusted earnings beating consensus estimates in its second quarter.
However, mining costs are rising due to factors such as currency fluctuations, fuel prices, and acid costs. Glencore has already raised its copper cost guidance by 20%, highlighting the need for capital discipline among miners seeking to benefit from the AI-driven copper boom.