Copper Soars to Record High on Tariff Speculation and Supply Concerns

Copper prices hit an all-time high on the London Metal Exchange (LME) in July, surpassing the previous record set in January. The benchmark three-month copper contract rose 0.8% to US$14,533 a tonne, driven by speculation over US tariffs and growing concerns about long-term supply.

The strong run for copper is expected to continue as demand accelerates in the coming years due to increasing use of the metal in artificial intelligence, data centres, renewable energy, and electrification. S&P Global has forecast global copper demand will rise 50% by 2040.

However, some of the world's largest copper mines are struggling to maintain production, raising questions about whether new supply can keep pace with growing demand. In fact, copper miners representing about two-thirds of global supply recorded a 3.5% decline in production during the first half following operational setbacks.

Chile, the world's largest copper-producing country, has been at the centre of this weaker performance, recording its lowest second-quarter copper production in at least 19 years and cutting its full-year output forecast for a second consecutive quarter. While estimates for the timing and size of a copper deficit vary, there is broad agreement that constrained mine supply will remain an important source of support for prices.