Copper Hits Record High Amid Supply Constraints and Rising Demand

Copper prices have hit a new record high on the London Metal Exchange, reaching $14,533 per metric tonne for three-month LME copper. This move surpasses the previous high set in January and reflects growing concerns over supply and demand.

The current price surge is attributed to tight physical supply, strong buying interest, and uncertainty surrounding potential US tariffs. Copper production cannot be increased quickly due to the lengthy process of developing new mines, which requires exploration, permitting, financing, and construction before they can begin producing.

Existing mines also face challenges with lower ore grades leading to increased costs and restricted output growth. In addition, production problems in major mining regions have added to concerns that supply may remain tight in the near term.

Rising demand across various industries is another key factor driving copper prices higher. Data centres are becoming a significant source of copper demand due to their electricity requirements, while electrification efforts, including electric vehicles and renewable energy projects, also contribute to increasing consumption.