Copper Prices Near Record High on AI Data Center Demand

Copper prices are nearing record highs due to rapidly growing demand from artificial intelligence data centers and power grid expansion. The three-month copper futures on the London Metal Exchange (LME) reached $14,215.50 a ton on August 23rd, up 3.08% this month and closing in on the record high of $14,527.50 a ton set in January.

Kang Song-chul, an analyst at Eugene Investment & Securities, points out that the fundamental cause of rising copper demand is growing electricity use, driven by the expansion of AI data centers, transmission networks, and defense needs beyond conventional cyclical demand.

However, supply disruptions in major producing countries are fueling prices. A second winter storm has battered Chile's Atacama region, the world's largest copper-producing area, prompting Lundin Mining to lower its copper output forecast for this year. Competition to secure physical copper is also intensifying, with spot copper available for immediate delivery on the LME trading at a premium of up to $545 a ton over three-month futures.