Copper Prices Soar Amid AI-Driven Demand and Global Supply Disruptions

Copper prices have reached an all-time high as supply disruptions and growing demand from artificial intelligence (AI), power grids, and electrification drive the rally. Three-month copper futures on the London Metal Exchange (LME) hit $14,728 per metric ton on September 8, while September Comex copper touched a record $6.739 per pound.

The LME copper price has gained nearly 18% in 2026. A major factor behind the rally is uncertainty over US trade policy, with Washington considering further measures that could affect global supply. The Commerce Department's assessment of a 15% tariff on refined copper from January 1, 2027, rising to 30% in 2028, has changed trade flows.

The physical supply picture also supports prices as global mine production fell 1.1% in the first half of 2026. The International Copper Study Group reported that copper concentrate output declined 2.6%, outweighing gains elsewhere. Chile's Codelco, the world's largest copper producer, saw a drop in first-half 2026 production due to operational restrictions at its El Teniente mine.

Average copper ore grades have fallen 40% since 1991, and average capital intensity for expanding existing projects has risen 65% since 2020. New copper projects take about 17 years on average from discovery to production, making it difficult to fix the current supply shortage quickly.