Data centers, grid upgrades, and electric vehicles are driving copper demand to levels that mine supply cannot match, pushing prices to record highs and reshaping the economics of the world's largest producers . [2] [3]
In 2026, copper prices on the London Metal Exchange reached new all-time highs, capping a rally that had delivered gains of more than 60 percent since April 2025 . The surge was not driven by the usual suspects—Chinese construction demand or manufacturing cycles—but by a less visible force: the explosive power requirements of artificial intelligence infrastructure and the parallel build-out of renewable energy grids . Every new data center training large language models, every wind farm connecting to transmission lines, and every electric vehicle rolling off assembly lines requires copper wiring, transformers, and cooling systems that cannot be substituted at scale . [2] [4] [5] [1] [6] [7] [8]
The rally has forced investors to reconsider which companies are positioned to benefit . While data centers account for only 1 percent of global copper demand today, Goldman Sachs analysts argue that markets are increasingly pricing the metal on expectations of future infrastructure spending rather than current consumption . That shift has elevated AI-related expectations above traditional drivers such as China's growth outlook and physical market tightness as the largest contributor to copper's cumulative price gains since early 2025 . Yet the supply side has not kept pace: the International Copper Study Group now forecasts a deficit of 150,000 metric tons in 2026, a reversal from earlier projections of surplus . The question for retail investors is which listed producers and equipment manufacturers stand to capture the windfall—and whether the supply squeeze thesis can withstand competing pressures from substitution, recycling, and macroeconomic headwinds . [9] [10] [11] [12] [13] [14]
The infrastructure bottleneck that rewrote demand forecasts
The copper market entered 2024 expecting a modest surplus, with production from new mines in the Democratic Republic of Congo, Peru, and Chile set to outstrip demand through the first quarter . That consensus unraveled as AI data centers began consuming power at rates far exceeding traditional facilities . Training and inference workloads place extreme demands on electrical infrastructure, requiring dense cabling, redundant power supplies, and liquid cooling systems that are copper-intensive by design . At the same time, grid operators in the United States and Europe faced the reality that meeting net-zero targets would require adding or refurbishing more than 80 million kilometers of electricity grid by 2040—the equivalent of the entire existing global network . [15] [16] [17] [7] [18]
BloombergNEF warns that copper demand from AI-powered facilities will average about 400,000 tonnes a year over the next decade, peaking at 572,000 tonnes in 2028 . This rise comes as other copper-hungry industries, like power transmission and wind energy, are also using more of the metal, with BNEF expecting their copper demand to almost double by 2035 . Together, they are putting heavy pressure on a market already held back by years of low investment in new mines . Copper may account for up to 6 percent of a data center's capital costs, but its role is essential . [19] [20] [21] [22] [23]
The International Energy Agency estimates that in a net-zero emissions scenario, average annual copper demand will reach 12 million metric tons per year between 2041 and 2050, up from 9 million tons in the announced pledges scenario . Electricity use will need to grow 20 percent faster over the next decade than in the previous one to accommodate electric vehicles, hydrogen electrolysis, and heat pumps . Copper and aluminum are essential for transmission lines, distribution grids, and transformers, and the availability of materials and manufacturing capacity is already causing tightness in supply chains . [24] [25] [26]
While construction and electrical grids have long been major markets for copper, the rise of electric vehicles, EV charging infrastructure, and energy storage applications now represent emerging drivers of consumption . Rapid urbanization in the Global South, as rural populations migrate to cities, is putting additional pressure on electricity grids . Copper's role in clean energy is projected to reach 61 percent of total demand by 2040 . [27] [28] [29]
The supply side: geology, permitting, and geopolitical risk
Meeting the expected demand requires significant investment in new mines, but the average time from discovery to production is 17 years . Challenges associated with finding, developing, permitting, and mining copper deposits mean that higher demand is being met by slow growth of new supply . Mines that are in operation tend to be quite large and operate for decades, with copper producers concentrating on mine expansions and brownfield projects aimed at extending mine lifetimes . [30] [31] [32]
The International Copper Study Group's April 2024 forecast projected that global mine production would increase by 2.7 percent in 2024, down from an earlier estimate of 3.7 percent . The downward revision was mainly due to slower-than-expected ramp-ups of several projects, delays in commissioning, revised company production guidance, and the closure of First Quantum's 380,000-metric-ton-per-year Cobre Panama mine . In 2025, global output was expected to benefit from the start-up of the Malmyzhskoye mine in the Russian Federation and the Kamoa-Kakula phase 3 expansion in the DRC, along with expansions and the opening of some medium and small mines . [33] [34] [35] [36]
Notable projects starting or expanding between 2022 and 2024 include Kamoa Kakula and Tenke in the DRC, Quellaveco and Torromocho in Peru, Quebrada Blanca QB2 in Chile, and Malmyzhskoye and Udokan in Russia . Production rates in countries affected by operational constraints in 2023—including Chile, China, Indonesia, Panama, and the United States—were expected to improve, but the recovery has been uneven . [37] [38]
Refined copper output in 2024 was expected to recover from a series of maintenance outages, accidents, and operational issues that occurred in 2023 in major copper-producing countries including Chile, Japan, India, Indonesia, and the United States . Electrowinning output was forecast to rise by 4 percent and secondary refined production from scrap by 6 percent, benefiting from expanded capacity . Robert Friedland, the mining entrepreneur behind Ivanhoe Mines' Kamoa-Kakula complex in the Democratic Republic of Congo—one of the world's largest copper mines—has been sounding the alarm about supply constraints . Over the past 10,000 years, humanity has mined about 700 million metric tons of copper, with 80 percent still in use today . Global annual consumption stands at 30 million tons, with only 4 million tons coming from recycling . To maintain 3 percent GDP growth—without additional electrification demands—the world would need to mine the equivalent of the past 10,000 years' production in the next 18 years . [39] [40] [41] [42] [43] [44]
Key figures reported by cited sources
A sourced, like-for-like view of the figures that frame this part of the story.
- 1% While data centers account for only 1% of global copper demand…
- 61% Copper’s Role in Clean Energy: Copper is essential in renewable…
- 427 million Supply and Demand Imbalance: Growing demand for copper, estimated at…
- 7 million Today, in the United States alone, copper is a critical mineral for…
- 20% in the announced pledges scenario, from 2041-2050, the average…
- 80 million By 2040, it’s estimated more than 80 million km of electricity grid…
The producers: cost curves, by-product credits, and currency effects
The economics of copper production shifted sharply between 2024 and 2025, with some producers compressing unit costs to multi-year lows on surging by-product credits while others saw costs climb under grade decline, seismic events, and stronger producer currencies . The steepest cost reductions in 2025 came not from operational tightening but from the soaring market value of co-produced metals . Freeport-McMoRan, one of the world's largest copper producers, reported net unit cash costs of $1.19 per pound, but its underlying cash costs before by-product credits were essentially flat . The improvement came from record credits, fueled by a 13 percent rise in gold production and a 48 percent jump in molybdenum output . [47] [48] [49] [50]
The pattern was even more extreme at Southern Copper, which benefits from exceptionally low-cost operations in Peru and Mexico . Freeport-McMoRan and Southern Copper held the highest copper reserves in 2023, and both companies are among the four leading firms in the copper mining industry . Among these four, Freeport-McMoRan and Southern Copper are the most focused on copper production . Freeport-McMoRan is known for its flagship Grasberg mine in Indonesia, one of the largest global copper and gold deposits . The company operates major mining operations in both North and South America . [51] [52] [53] [54] [55] [56] [57]
J.P. Morgan projects a refined copper shortfall of roughly 330,000 metric tons, driven by severe supply disruptions and accelerating demand from AI and renewables . Goldman Sachs anticipates a 300,000-metric-ton surplus in 2026 but warns of structural deficits starting in 2027, with prices averaging $10,710 in the first half of 2026 before declining to $11,000 by year-end . Prices of copper, the backbone of electrification, were volatile yet mostly favorable in 2025 due to global economic and trade uncertainties . Copper prices started 2026 on a strong note, underpinned by robust demand from China and the United States . Structural tailwinds, including electric vehicles, renewable energy projects, data-center growth, and grid modernization, continue to boost copper consumption . Worries about tightening supply amid rising EV and infrastructure demand are supporting the red metal . [58] [59] [60] [61] [62] [63]
The equipment makers: currency translation and organic growth
For investors looking beyond mine operators, the global mining equipment sector presents a different set of opportunities and challenges . When two of the world's largest original equipment manufacturers report from Stockholm in Swedish kronor, yet generate the vast majority of their revenues in US dollars, Australian dollars, and Brazilian reals, headline figures can tell a story that is almost the inverse of operational reality . Understanding this dynamic is the starting point for any serious assessment of Epiroc and Sandvik June quarter results . [64] [65] [66] [67]
The June 2026 quarter delivered a broadly positive underlying picture for both Epiroc and Sandvik Mining and Rock Excavation Technology, with order intake climbing, revenues rising, and profitability expanding in organic terms . Yet both companies saw share price pressure following the releases, a reaction that reflects not operational failure but rather the persistent expectations gap that defines how financial markets process currency-distorted industrial results . Before any performance metric from a Swedish OEM can be meaningfully interpreted, the Swedish krona's behavior must be accounted for . The krona has experienced sustained weakness against the US dollar, euro, and Australian dollar over recent years, creating a mechanical headwind when foreign-currency revenues are translated back into SEK for reporting purposes . [68] [69] [70] [71]
Copper mining investments focus on existing operations rather than new projects, leading to increased mergers-and-acquisitions activity as companies secure future supplies to meet rising demand . Investment in clean energy is surging, with trillions needed annually to achieve net-zero by 2050, highlighting copper's critical role in supporting sustainable growth . [72] [73]
The risks: substitution, recycling, and macro headwinds
The supply squeeze thesis faces several material risks . Aluminum can substitute for copper in some transmission and distribution applications, particularly where weight is a constraint . Recycling efficiency gains are also a factor: secondary refined production from scrap was forecast to rise by 6 percent in 2024, benefiting from expanded capacity . The United States alone has nearly 7 million miles of electrical wires powering homes, businesses, and industry, representing a vast stock of copper that could be recovered and reprocessed . [14] [24] [40] [46]
BloombergNEF highlighted copper's price volatility throughout 2023, pushed by China's slow economic recovery and the bleak economic outlook in the United States . After hitting a record high of $10,730 per metric ton in early March on the London Metal Exchange, prices dropped 21 percent to $8,450 per metric ton by late June, a level $300 below where they were projected to be . However, prices were expected to climb to a modest recovery in 2024 as burgeoning demand from the energy transition offset global economic weakness . [74] [75] [76]
The International Wrought Copper Council completed its six-monthly review of the copper market in October 2024 and finalized its forecasts for copper supply and demand . A 2 percent increase in copper mine production was forecast, and both the 2024 and 2025 October demand forecasts were slightly lower than the forecasts prepared in May . The demand side forecasts were prepared by the IWCC during October 2024 . [77] [78] [79] [80] [81] [82] [83]
Traditional demand drivers have not disappeared . China's growth outlook, moves in the US dollar, and physical market tightness remain important contributors to copper's price trajectory, even as AI-related expectations have overtaken them as the largest driver of cumulative gains since early 2025 . The ICSG met in Lisbon, Portugal, in early October for its second gathering of the year, joining government representatives and industry advisors from the world's leading copper producing and consuming countries to discuss the outlook for copper as the new year approaches . Production rates were expected to improve in countries affected by operational constraints in 2023, namely Chile, China, Indonesia, Panama, and the US . [14] [12] [84] [38]
Selected reported percent figures
A sourced, like-for-like view of the figures that frame this part of the story.
- 1% While data centers account for only 1% of global copper demand…
- 61% Copper’s Role in Clean Energy: Copper is essential in renewable…
- 20% in the announced pledges scenario, from 2041-2050, the average…
- 2% 2% increase in copper mine production is forecast.
- 7% 7% forecast by the group in October 2023.
- 4% However, electrowinning output is forecast to rise by 4% and…
The forward curve: technical levels and structural deficits
Technical analysis confirms a strong bullish trend with moving averages in positive alignment . Copper is currently targeting the $14,233 resistance level, with a potential breakout toward $15,000 by 2026, supported by critical floors between $13,300 and $13,400 . Since April 2025, copper prices have accumulated a gain of over 60 percent, with the core driving factor being the continuously growing market demand for copper amid the ongoing development of AI . [85] [86] [5]
With the rapid development of AI in recent years, it has not only driven demand for chips, servers, and optical modules, but is also reshaping power systems, with copper being one of the most critical metals in power infrastructure . On the demand side, AI data centers represent the most compelling source of incremental copper demand . AI training and inference place far higher demands on computing power, power supply, and heat dissipation than traditional data centers . [8] [87] [17]
Goldman Sachs commodities strategists wrote that "AI has become a key narrative shaping expectations for future power, grid and copper demand" . Copper is used throughout the AI ecosystem, from the miles of electrical wiring inside data centers to the transformers, switchgear, and high-voltage transmission lines needed to deliver power to the infrastructure underpinning the AI build-out . Goldman argues those future infrastructure needs—not today's physical demand—are becoming an increasingly important force in copper markets . [88] [89] [11]
The collision between geology and electrification
The copper supply squeeze reflects a collision between electrification, grid upgrades, and AI data centers on one side, and the slow-moving geology of mine development on the other . Driven by rising demand from electrification, renewable energy infrastructure, data centers, artificial intelligence development, and grid upgrades, the legendary mining entrepreneur Robert Friedland has contrasted the vast oil market with the smaller, thinly traded metals markets, including copper . He noted that shifting away from crude oil requires these metals for electric vehicles, windmills, solar panels, and military technology . He also highlighted copper's essential role in underwater power cables and offshore wind farms . [90] [91] [92] [93]
When factoring in green technology and AI, the shortfall grows even larger . Copper's story runs deep in human history, dating back over 10,000 years . It was one of the first metals humans mastered, shaping coins, jewelry, tools, and weaponry that fueled societal advancement . Prized for its durability, malleability, and dependability, copper's journey took a historic turn in the 1800s when its exceptional electrical conductivity sparked the revolutionary age of telegraphy and incandescent electric lamps to light homes . [94] [95] [96] [97]
Growing demand for copper, estimated at 427 million metric tons by 2050, faces supply challenges due to declining ore quality and geopolitical issues in top-producing regions . BloombergNEF warns that the copper supply gap could swell to 6 million tonnes by 2035 if demand keeps rising at this pace . The rapid global rollout of artificial intelligence data centers is set to add new pressure to the already strained copper market . Copper miners with productive assets have much to gain as supply and demand tighten and prices soar . The question is not whether demand will materialize—the infrastructure requirements are already visible in grid planning documents and data-center construction pipelines—but whether the mining industry can deliver metal fast enough to prevent a structural deficit that pushes prices beyond the reach of the very technologies that depend on it . [45] [98] [99] [100] [3] [31]