Copper prices rose on Friday, yet most investment portfolios remain without exposure to the metal that underpins electric vehicles, renewable energy, and AI infrastructure. Despite China — which consumes 60% of global supply — showing signs of economic weakness, prices continued to climb in what analysts describe as an “unnatural” move.
Major banks expect copper to reach $15,000 per ton — a 43% increase from current levels — but stress that this outlook depends on distinguishing between temporary disruptions and long-term structural drivers. The market faces a structural supply deficit through 2027, leading analysts to label the present situation as a buying opportunity, albeit one fraught with volatility risks.
Supply Shocks Tighten the Global Market
Three major disruptions have removed large amounts of copper from global supply:
Grasberg Disaster: Freeport-McMoRan’s Grasberg mine in Indonesia, the world’s second-largest, was forced into full closure after a catastrophic mudflow collapse on September 8, 2025. This could wipe out between 525,000 and 591,000 tons of supply through end-2026 — around 2.6% of global mine production.
Chile Mine Collapse: Codelco halted operations at its El Teniente mine following a tunnel collapse that killed seven workers.
Peru Protests: Hudbay suspended milling at its Constancia mine amid social unrest and protest blockades.
Goldman Sachs revised its 2025 forecast from a surplus of 105,000 tons to a deficit of 55,500 tons. Benchmark Mineral Intelligence expects the deepest deficit since 2004. Analysts note: “When three major mines shut down simultaneously, the market doesn’t just adapt — it reprices everything.”
AI Infrastructure Creates New Demand
Artificial intelligence is driving unexpected demand. Each hyperscale AI data center requires up to 50,000 tons of copper — compared with 5,000–15,000 tons for traditional centers. BloombergNEF estimates AI-driven data centers will consume an average of 400,000 tons annually over the next decade, peaking at 572,000 tons in 2028. By 2035, cumulative copper demand from these facilities could exceed 4.3 million tons.
Power consumption is also surging: AI data center electricity demand is projected to rise from 77 GW in 2023 to 334 GW by 2030, requiring vast amounts of copper in internal distribution and grid connections.
Electrification Supports Long-Term Demand
Several structural trends reinforce sustainable growth in copper demand:
Electric Vehicles: EVs use 2–3 times more copper than conventional cars. The International Copper Study Group (ICSG) forecasts demand at 33 million tons by 2035 and 37 million tons by 2050, up from 27 million in 2024.
Renewables: Wind, solar, and grid modernization projects rely heavily on copper for generation and transmission.
Given the 17-year average lead time for new mine development, supply is unlikely to catch up quickly, entrenching the deficit.
Market Forecasts
Bank of America: $11,313 per ton in 2026, rising to $13,501 in 2027.
UBS: $11,000 per ton by September 2026.
J.P. Morgan: ~$11,000 per ton average in 2026.
Citi: Medium-term scenarios between $11,000–12,000.
As of 15:29 GMT in U.S. trading, December copper futures rose 1.9% to $5.04 per pound.
