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Copper soared to a record high of more than $13,000 per tonne on Tuesday, as concerns over supply disruption and tariffs extended a rally that has pushed up the price of the metal by almost a third since October.
The price rose 3 per cent in early London trading to more than $13,370 per tonne, having only passed $12,000 for the first time in late December.
The price of copper has hit a series of record highs since it began a sharp rally in October, after disruptions at several large mines, including Freeport-McMoRan’s huge Grasberg complex in Indonesia.
The disruptions have intensified concerns about medium-term shortages of copper, which is widely used in a range of sectors, from construction to energy and technology. Analysts expect demand to rise thanks in part to its use in the data centres that power artificial intelligence — a booming sector — and in defence applications.
Supply disruptions looked set to continue this month after workers at Capstone Copper’s Mantoverde copper and gold mine in Chile went on strike. The Vancouver-based company said at the start of January that activities at the mine “will be gradually reduced in a safe manner”.
Although global demand for copper is growing, many of the world’s major mines are ageing and becoming less productive, and it takes many years and huge sums of money to find deposits and bring new mines online.
Analysts at BMI, part of Fitch Group, said this week they expected the price of copper to average $11,000 per tonne this year, while prices would reach $17,000 per tonne in 2034. This would come as a “structural deficit persists due to a strong demand outlook as the green transition accelerates towards the latter half of the decade”, they said.
Fears that Donald Trump’s administration may impose additional import tariffs on the metal have also driven up demand, as traders seek to ship supplies in large quantities into the US ahead of any new levies.
The amount of copper in US Comex warehouses has jumped to a record high of more than 450,000 tonnes, compared with less than 100,000 tonnes a year ago and about 400,000 at the start of December.
The US government’s capture of Venezuelan President Nicolás Maduro “seems to have had no impact on the current risk tone” for copper, said analysts at Benchmark Mineral Intelligence in a note. Copper demand is widely seen as a barometer of economic health.
Supply disruptions and shortages of copper outside the US meant it made sense for the price to be higher than it was a year ago, when it was about $9,000 per tonne, said Benchmark analyst Albert Mackenzie.
But the copper price had “got carried away . . . people have over-egged it”, he said. “There’s too much based on speculation of, for example, what AI and [electric vehicle] demand could look like, things that aren’t certain yet.”