Copper Surges as Green Energy and Geopolitics Drive Demand

Copper is emerging as a critical metal for the global economy, particularly as the world shifts toward green energy. An electric vehicle requires roughly 80 kilograms of copper, far more than the 20 kilograms needed for a conventional car. Solar panels, charging stations, and new power transmission lines all rely heavily on copper, making it indispensable for renewable energy systems. Kirill Dmitriev, Russia's presidential envoy for investment and economic cooperation, recently compared copper's investment appeal to that of gold, calling it 'the new gold.'

Copper prices have surged in recent months, with three-month copper futures on the London Metal Exchange (LME) climbing above $14,800 per metric ton in mid-September. On Comex, the price reached an all-time high of $6.9285 per pound. The metal has seen a 47% increase over the past year, driven by rising demand and geopolitical tensions. The U.S. and China have been stockpiling copper in anticipation of potential tariffs, further tightening global supplies.

The International Copper Study Group (ICSG) reported a market surplus in the first five months of 2026, with output rising 3% year-on-year to 12.05 million tonnes, while consumption grew 2.2% to 11.58 million tonnes. Despite the surplus, prices continue to climb due to supply constraints and increasing demand from renewable energy projects. The University of Michigan predicts that global copper prices could double by 2050 if the world fully transitions to clean energy.

The rise of artificial intelligence is another major driver of copper demand, as data centers consume large amounts of the metal for power cables, cooling systems, and circuit boards. Geopolitical factors, such as disruptions in the Strait of Hormuz and the U.S.-China trade rivalry, are also influencing the market. The U.S. has reclassified copper as a strategic material, aiming to reduce dependence on imports.

Global copper reserves are concentrated in countries like Chile, Australia, Peru, and Russia. However, mining output is expected to decline this year for the first time since 2017, exacerbating supply concerns. S&P Global forecasts that by 2040, copper consumption will rise by 50%, with a potential supply shortfall exceeding 10 million tonnes annually. Experts warn that new mining projects will not significantly increase supply before 2030.