Copper Prices Hit $14,500 Amid Supply Crunch
Copper prices on the London Metal Exchange have surpassed $14,500 per tonne. The metal has risen 16% to 17% in 2026 and nearly 48% over the past year.
The upward trend is driven by a sharp contraction in global supply. Chile, the world's largest producer, accounts for nearly a quarter of global output. Its production is expected to fall 2.6% this year to 5.3 million tonnes.
Demand is rising simultaneously. Electric vehicles require roughly three times as much copper as combustion-engine cars. AI data centres also consume significant amounts for busbars and cooling infrastructure.
Chilean Mines Face Operational Setbacks
A fatal rockburst at Codelco’s El Teniente mine halted operations last year. Output at the site has dropped to a 25-year low. Expansion work has also been suspended due to seismic risks.
Codelco projects a production cap of 300,000 tonnes for the next five years. This is down from 356,000 tonnes before the incident. Other major mines, including BHP’s Escondida and Spence, face similar structural issues.
Aging infrastructure and declining ore grades affect multiple sites. These factors reduce the efficiency of extraction processes. The industry is currently undergoing a transition that temporarily lowers output.
Sulphuric Acid Shortage Impacts Extraction
Sulphuric acid is essential for extracting copper from low-grade ores. China has halted exports to prioritize domestic fertilizer production. This decision restricts global supply of the chemical.
Disruptions in the Strait of Hormuz have slowed shipments. Approximately 15% of global copper production depends directly on this acid. Reduced availability limits the volume of copper that can be processed.
Long-Term Demand Projections Accelerate
S&P Global forecasts global copper demand will reach 42 million tonnes by 2040. Current demand stands at approximately 28 million tonnes. This represents a significant increase over the next decade.
Data centre demand alone is projected to grow from 1.1 million to 2.5 million tonnes. Grid modernization and renewable energy projects also contribute to this rise. The gap between supply and demand continues to widen.
