Copper Prices Soar on Trade Policy and AI Demand Collision
Copper prices have surged to new heights in recent weeks, fueled by a combination of shifting trade policies and increased demand for artificial intelligence infrastructure. The metal has reached an all-time high above $6.72 per pound on the Comex exchange, with inventories in U.S. warehouses ballooning to unprecedented levels.
The current tariff policy is a key driver of this trend. Washington imposed a 50% Section 232 tariff on semi-finished copper products and derivatives in 2025, and later expanded the rate structure in April 2026 while leaving refined cathode largely exempt for now. This has triggered a scramble among traders to reroute metal into U.S. warehouses ahead of the possibility that refined copper will eventually be swept into the tariff policy.
As a result, Comex inventories have increased significantly, effectively draining the global surplus and leaving the non-U.S. market in a state of balance or even deficit if the flows continue. Analysts at CRU had previously projected a healthy 2026 surplus, but now describe the situation as more precarious.
The second key driver is demand, which has grown structurally higher due to the increasing need for copper in data centers and other AI infrastructure. Hyperscalers require large amounts of wiring, bus bars, and cooling infrastructure regardless of price fluctuations, creating a new type of buyer that takes its cues from construction and manufacturing cycles.
The chart for Freeport-McMoRan (FCX), the largest domestic producer of refined copper, confirms this story. Shares have run from the low $40s a year ago to the mid-$70s, with the 50-day moving average trending upward and MACD in bullish territory after a rocky spring.
Southern Copper (SCCO) is another major player, offering low costs and copper price leverage. The company's Q2 2026 numbers show revenue rising 41% year-over-year to $4.29 billion, with net income jumping more than 70% to $1.67 billion.
BHP Group (BHP), a diversified pick, has also seen significant gains. For the first time in its history, copper generated more than half of BHP's underlying EBITDA in fiscal 2026, overtaking iron ore as the group's largest earnings contributor.