Copper prices are still climbing.
London Metal Exchange, or LME, copper futures rose above $14,533 per ton on the night of Sept. 7, breaking the previous high set in January and marking a record for the exchange. The move extended on Sept. 8, when prices touched an intraday high of $14,616 per ton. As of 4 p.m. Beijing time, LME copper futures were still holding near $14,600 per ton.
Spot copper in China had already moved above 110,000 yuan, also a record high. So far this year, LME copper futures are up more than 17%, with a 47% gain over the past 12 months.
The rally came even as U.S. exchanges were closed for Labor Day and overall market risk appetite was under pressure, a sign of how strong the forces behind the price move have become.
Tariff expectations and a rush for copper in the U.S. drove the latest spike
Long-term demand stories tied to grid construction, artificial intelligence, and data center expansion have been in the market for some time. This time, though, the report says the direct trigger for the rapid move higher was U.S. copper tariff expectations and a global rush to redirect copper into the American market.
Cristián Cifuentes, a senior analyst at Chilean copper industry think tank Cesco, said the rally was 「more driven by tariff-induced metal transfers than by strong end demand」 and was, in essence, 「a localized shortage rather than a surplus of global demand」.
Rafael Barcellos, an analyst at Bradesco BBI, said global copper mine supply conditions are deteriorating. He warned that extreme weather in Chile forced Antofagasta and Lundin to cut production guidance, tightening an already strained spot market.
AI and data centers are still a major long-term demand force
In the past, copper demand was tied more closely to real estate and large-scale infrastructure cycles. Now the deeper engine behind the market is shifting toward AI and new energy.
The growth of artificial intelligence and rapid data center construction has become an important source of copper demand. The metal is needed not only for wiring inside data centers, but also for new power generation, transmission lines, substations, transformers, and broader grid upgrades.
A high-performance server used for AI training can contain 15 to 30 kilograms of copper, or three to six times the amount used in a standard server. Industry estimates cited in the report say a 1 gigawatt computing cluster data center uses 2.5 times as much copper as a traditional data center. Construction of global computing clusters alone is expected to add nearly 400,000 tons of copper demand in 2026, and that figure could rise to the million-ton level by 2030.
Hundreds of thousands of tons have been shipped into the U.S.
While the long-term bullish case for copper demand is widely recognized, near-term price action has been dominated by more immediate trade flows. This year, hundreds of thousands of tons of copper have been moved into the U.S. as traders try to profit from higher domestic prices, mainly because Comex copper futures have been trading at a premium.
Bloomberg reported on Aug. 4, citing data from financial information provider IHS Markit, that about 200,000 tons of copper arrived in the U.S. in July, the largest monthly inflow since records began in 2014. Including off-market inventories, total domestic stockpiles in the U.S. are estimated at 1.4 million to 1.5 million tons, a record over the past century.
The market is still betting that the U.S. may impose tariffs on refined copper. Roughly two months have passed since the Commerce Department’s deadline to submit a report to the White House on whether such tariffs are necessary, but the report has not been released. The market continues to price in the possibility of tariffs on primary copper imports.
In practical terms, physical copper has been pulled out of Europe and Asia and redirected into the U.S., while LME inventories have kept falling. The metal has not disappeared globally. It has accumulated in the U.S., leaving other regional spot markets tighter and pushing prices higher.
Supply pressure is broadening across the industry
The report argues that the bigger problem lies on the supply side, where global copper production is going through what it described as a rare multi-point breakdown. In 2026, the market may see the first decline in global copper mine output in a decade.
In the first half of 2026, output from a sample of 49 copper companies totaled 8.196 million tons, down 4.3% year over year, a reduction of 371,000 tons. The second-quarter decline widened to 4.5%. At the same time, full-year production guidance was revised lower by a net 38,000 tons, and only six of 35 sample companies raised capital spending.
Those 49 companies account for 72.3% of global mined copper output. The report says that level of coverage shows the contraction is not confined to one region. It spans nearly three-quarters of the industry’s main producers and points to a sector-wide tightening in supply.
Data from the International Copper Study Group, or ICSG, showed that global copper mine production fell 1.1% year over year in the first half of 2026. On a copper concentrate basis, the drop was steeper at 2.6%. Major producers Codelco and Freeport-McMoRan both posted double-digit declines in output.
Morgan Stanley has also cut its earlier expectations for output growth to roughly flat or slightly negative. That would put the market on track for the first annual decline in global copper mine production since 2017.
Chile exports weakened even as prices rose
Chile, the world’s largest copper producer, has become one of the market’s key pressure points. Harsh winter storms and disruptions at mines pushed the country’s copper exports in August to their lowest level in more than a year. Heavy rain, snow, and strong winds in July and August disrupted mine operations and repeatedly affected ports.
Data released Monday by Chile’s central bank showed August copper export revenue at $4.62 billion, down 14% from July and down 3.2% from a year earlier, the lowest monthly level since July 2025.
That drop came even though copper prices were much stronger. The report said average copper prices in August were more than 40% higher than a year earlier. Falling export revenue against that backdrop points to an even sharper decline in Chile’s actual export volumes.
Antofagasta and Lundin Mining have lowered their 2026 production guidance ranges to 625,000 to 655,000 tons and 300,000 to 325,000 tons, respectively.
Higher sulfuric acid costs are hitting Congo copper output
Another less visible pressure point is sulfuric acid. According to the report, geopolitical conflict in the Middle East disrupted sulfur shipments through the Strait of Hormuz, pushing the cost of sulfuric-acid-dependent hydrometallurgical copper production in the Democratic Republic of Congo to about $7,000 per ton, up 47% from the end of last year.
That has put overseas hydrometallurgical copper capacity under broad pressure. The report describes strain building across the supply chain, from mining and smelting to sulfuric acid inputs.
El Niño-related weather risks are adding to the squeeze
Extreme weather is amplifying supply risk further. For copper-producing regions in South America and Africa, which together account for about half of global output, a strong El Niño is bringing floods that threaten mining and logistics in Chile and Peru. At the same time, drought is starting to curb hydropower supply in the Democratic Republic of Congo and Zambia.
As demand from new energy vehicles, high-voltage grids, and AI data centers converges with rising power and computing needs, copper is moving beyond its role as a basic industrial commodity and taking on greater strategic weight.
In the near term, the report says the main variables to watch are mine production in Chile, export policy in the Democratic Republic of Congo, U.S. tariff policy, and changes in global inventories. Over a longer horizon, aging mines, long development cycles for new projects, and continued demand from AI computing, power grids, and new energy are keeping the market structurally tight.