Copper's Record High: AI Supercharge or Tariff Mirage?
Copper prices have recently reached a record high near $6.87 per pound on COMEX, but experts question whether this is due to genuine structural changes or temporary market distortions.
The rise of artificial intelligence (AI) has increased demand for copper, which is used in everything from data centers to power generation and transmission lines. However, the impact of AI on copper prices will not be determined solely by the number of servers manufactured but also by the rebuilding of the entire electricity system around them.
Long-term copper demand is being driven by multiple factors, including grid expansion, data centers and cloud infrastructure, electric vehicles and charging networks, renewable energy projects, defense and advanced manufacturing, industrial automation and robotics, and conventional construction and urbanization. According to the International Energy Agency, copper demand could increase by approximately seven million tonnes by 2040.
The market is currently experiencing a collision between three different clocks: AI electricity demand, grid expansion, and new copper supply development. While the short-term price may have been amplified by tariffs, inventory relocation, and speculative positioning, the long-term thesis remains intact. A controlled correction followed by support above the former breakout region would provide stronger confirmation than another vertical rally.