Copper prices remained close to record highs on Tuesday, with the benchmark London Metal Exchange (LME) contract trading just below the $14,000-per-tonne level as tightening supply conditions and renewed optimism around industrial demand continued to support the rally.
The three-month copper contract on the LME was trading marginally higher at $13,962 per tonne by late morning trade. Earlier in the session, prices briefly touched their highest intraday level since January, when copper had surged beyond $14,500 per tonne.
The recent rally in copper has been fuelled by a mix of supply disruptions, geopolitical uncertainty in the Middle East, and signs of improving demand from China, the world’s largest consumer of the industrial metal.
Supply Disruptions Push Copper Higher
One of the biggest triggers behind the latest price surge has been mounting concerns over global copper supply.
PT Freeport Indonesia recently reduced its copper production target for 2026 to 700 million pounds, sharply lower than its earlier estimate of 1 billion pounds.
The revision came after delays in restarting operations at the massive Grasberg Mine, where a deadly mudslide in September 2025 disrupted mining activity. Full production capacity is now expected to resume only by early 2028.
Supply pressures have also intensified due to disruptions involving sulfuric acid, a key chemical used in extracting copper from oxide ores. Sulfuric acid-based extraction accounts for nearly 20% of global copper production.
Shipments of sulfur through the Strait of Hormuz have faced disruptions amid ongoing geopolitical tensions in the region, creating shortages for major copper-producing nations.
Countries such as Democratic Republic of the Congo and Zambia have already been impacted, while Chile is also witnessing tighter supplies following Chinese restrictions on sulfuric acid exports.
AI And Technology Boom Adding Momentum
Copper has increasingly become a preferred commodity bet for investors looking to benefit from the rapid growth of artificial intelligence infrastructure, electric vehicles, and clean-energy projects.
Analysts say the metal’s recent price movement has shown stronger correlation with gains in US technology stocks, reflecting expectations that demand for copper-intensive infrastructure will continue rising.
Copper plays a critical role in electric grids, semiconductors, battery systems, renewable energy networks, and data centres linked to AI expansion.
Demand Concerns Limit Further Upside
Despite strong supply-side support, analysts believe concerns around slowing global economic growth are preventing prices from rising even further.
Since late February, when the first wave of strikes involving Iran triggered volatility in energy markets, copper prices have advanced only moderately compared to other commodities.
The International Copper Study Group has revised down its forecast for global mine production growth in 2026 to 1.6%, lower than its earlier estimate of 2.3%.
At the same time, the group still expects a surplus of around 96,000 tonnes in the refined copper market this year.
The organisation also lowered its demand growth projection for copper to 1.6%, citing a weakening global economic outlook and heightened geopolitical uncertainty.
Market participants are now closely watching developments in the Middle East, China’s industrial recovery, and future supply updates from major mining companies for further direction on copper prices.