AI Boom Drives Copper Prices to Record Highs

Copper prices have surged to near all-time highs due to the AI boom, with prices reaching $13,791 per ton on the London Metal Exchange. Supply constraints include the Grasberg mine in Indonesia, the world's second-largest source, which has slowed output after a September landslide, with forecasts cut from 85% to 65% capacity. Political factors, such as potential US tariffs of up to 15% on copper imports in 2027, are also unsettling the market, leading to a 40% increase in trading volume on COMEX in New York and a drop in London stockpiles to five-month lows. Demand is further boosted by electric vehicles, which require up to four times more copper than internal combustion engine vehicles. In China, copper deficits are more acute, with Shanghai Futures Exchange inventories falling to a 2.5-year low of 69,000 tons in late July, an 80% drop from mid-March, while import premiums for copper in China have hit record highs. Imports of copper into China reached a nine-month high of 280,000 tons in June.