Copper prices reached a record high of approximately $6.90 per pound on Thursday, following a rally influenced by a combination of constrained supply and increased demand for electrification. The price increase comes amid a mixed economic growth backdrop, complicating the traditional interpretation of copper as a reliable indicator of economic health.
William Osnato, director of commodity data research and analysis at Barchart, noted that the surge in copper demand is driven more by data center and power grid needs to support the rapid expansion of the AI industry rather than broad economic growth.
The limited supply of copper, exacerbated by disruptions in mining operations in Chile, the world's largest copper producer, has contributed to the price increase. Factors such as heavy snowfall, rainfall, and high winds have hindered mining activities. Additionally, potential U.S. tariffs and China's restrictions on scrap copper availability have further tightened global supplies.
In the first half of 2026, China's grid investment rose by 13% year-over-year, with plans to invest approximately $574 billion in power grid upgrades. The recent price surge was also influenced by the Democratic Republic of Congo's ban on copper and cobalt concentrate exports to promote domestic processing. Osnato highlighted that these supply disruptions have led consumers to withdraw metal from London Metal Exchange warehouses, increasing refining costs.