Copper Prices Soar Amidst Declining Global Supply
Copper prices have been surging in recent months, reaching a new record high of $14,779 per ton on the London Metal Exchange. The price increase has been attributed to several factors, but one theory is that traders are stockpiling metal ahead of potential tariffs. However, data suggests this may not be the case.
According to the International Copper Study Group (ICSG), global mine production fell 1.1% in the first half of 2026, with output declining in Chile, Indonesia, and the Democratic Republic of Congo. This marks a potential annual decline in global copper mine supply since 2017. The ICSG also reports that major copper discoveries have been decreasing in recent years, with only 8.7 million tons found since 2020 at a cost of $16.4 billion.
The easy deposits were largely discovered generations ago, and the industry is now facing significant challenges in finding new sources of copper. The average drilling depth has increased by nearly 50% since 2010, and ore grades are declining. Permitting has also become slower. This means that a deposit found today may not produce copper until the 2040s.
Meanwhile, demand for copper continues to rise, driven in part by the increasing use of artificial intelligence (AI) in data centers. Research published in Resources Policy found that copper accounts for 82% of the total mineral mass in AI data center construction. Bank of America estimates that each incremental megawatt of data center capacity embeds 60-75 tons of metal, mostly copper.
Copper mining stocks have also been performing well, with Freeport-McMoRan up 44% year-to-date and Ivanhoe Mines and BHP both up around 45%. The refined market has been running close to balanced, flipping between small surpluses and deficits month to month. Bloomberg Intelligence's model shows surpluses in 2025 and 2026 and doesn't turn negative until later this decade.