Copper prices have retreated from their record highs in July, but analysts say the metal’s powerful rally is far from over. Strong demand is expected to outstrip supply soon, potentially setting the stage for another sharp upside move.
John Caruso, senior market strategist at RJO Futures, said copper is “a ticking time bomb waiting for an explosive price move,” pointing to a likely persistent structural deficit in supply, with demand expected to increase by nearly one million metric tons annually over the next decade.
And while the administration of President Donald Trump has moved away from clean-energy policies — eliminating billions of dollars in funding for industries where copper is a key component — global efforts to tackle climate change continue. The surge in electricity demand from artificial-intelligence data centers is also driving expectations of long-term copper consumption.
David Aspell, co-head of investing at Mount Lucas Management, said the broader demand outlook for copper remains “solid,” supported by AI infrastructure growth and rising requirements from data centers. “Demand is still strong, and it’s expected to stay that way,” he added.
Record Rally Then a Pullback
A Dow Jones analysis of FactSet data shows that benchmark US copper prices at this year’s settlement peak were up 44.5% from the end of 2024.
Copper hit an intraday record of 5.959 dollars per pound on 24 July. CQG data also show that three-month LME copper futures touched an unprecedented 11,200 dollars per metric ton on 29 October.
Speculation that the Trump administration might impose tariffs on imported refined copper pushed CME Comex prices in New York above their London counterparts.
“The usually stable spread between London and New York started to diverge when tariffs were floated,” Aspell said. “Comex prices climbed in anticipation of possible measures.”
Importers rushed to bring copper into the US ahead of potential tariffs and were willing to pay higher prices.
However, New York futures fell back after the Trump administration announced that tariffs would apply to processed — not refined — copper.
Comex prices are now down roughly 15% from their highs less than four months ago.
Roqaya Ibrahim, senior commodities and energy strategist at BCA Research, said the ongoing risk of tariffs on refined copper will continue to influence the market.
She noted that the exemption for refined copper will be reassessed in summer 2026, adding that US copper is again trading at a premium to LME levels, signaling continued storage and stockpiling in New York.
Ibrahim expects the global copper market to remain “imbalanced” until the tariff decision is finalized, limiting any meaningful downside in 2025.
The Real Story Behind Copper Demand
Trump’s shift away from clean-energy priorities — cutting funding and encouraging oil, coal, and other fossil fuels — could weigh on demand for copper used across renewable-energy technologies.
But Caruso at RJO Futures said the “real story” is the soaring electricity consumption from AI data centers.
A 2024 US Department of Energy report, authored by Lawrence Berkeley National Laboratory, found that data centers used about 4.4% of total US electricity in 2023. That share is expected to rise to between 6.7% and 12% by 2028.
“The expectation is that electricity demand from AI data centers will continue rising and may double by the end of the decade,” Caruso said.
He added that capital spending on AI infrastructure “remains a dominant market theme with no signs of slowing.”
According to the International Energy Agency (IEA), the global copper market could face a supply shortfall of up to 30% by 2035, driven by mining challenges and soaring demand for electrification technologies.
“AI’s growth phase is still in its very early innings,” Caruso concluded. “In my view, that leaves copper with plenty of room to run.”
