Copper has surged to a fresh record on the London Metal Exchange, driven by surging structural demand from AI infrastructure, electrification and defense, alongside a supply squeeze created by looming US tariffs. Traders have pulled copper into US warehouses ahead of expected duties, draining LME and Shanghai stockpiles and creating a physical-market squeeze even as global supply looks adequate on paper.
Three-month copper on the London Metal Exchange has climbed to a new record above $14,530 per metric tonne, up roughly 16.6% from its 2025 closing level of $12,466 and around 69.2% above its April 2025 low of $8,590. Separately, copper touched an all-time intraday high of $14,527.50 per metric ton on January 29, 2026, and by early September prices were still hovering around $14,430 per metric ton.
Demand is broadening beyond data centers
AI-driven data center construction is only part of the story. These facilities need additional power generation, transmission lines, substations and grid upgrades, while electric vehicles, renewable energy projects and rising defense budgets are adding further layers of demand. Copper supply, meanwhile, cannot expand quickly: new mines take years to permit and build, and existing operations face declining ore grades that raise costs and limit output growth.
Tariff fears are reshaping where copper sits
An ongoing Section 232 investigation into US copper imports has markets pricing in duties, with proposals circulating for a 15% tariff starting January 2027, potentially rising to 30% by 2028. That expectation pushed a record 225,094 metric tons of refined copper into the US in July 2026 alone, swelling US Comex inventories to between 695,000 and 766,000 short tons. LME and Shanghai Futures Exchange stocks have fallen sharply as a result, often dipping below 250,000 tons, since metal that would normally replenish global warehouses has been rerouted to American storage.
Falling LME inventories can make buyers nervous, particularly those needing copper for immediate delivery. That can push nearby prices higher in what traders call a physical-market squeeze.
Mine outages and momentum add fuel
Mine disruptions in Chile and Indonesia, two of the world's dominant copper-producing regions, have removed tonnage from the market just as electrification-linked demand runs hot. Once copper broke above previous records, momentum traders piled in while short sellers were forced to buy back positions to limit losses, reinforcing the rally. For full year 2025, copper prices rose more than 40%, the largest annual gain the metal has posted since 2009.
Front-loading will eventually fade
Front-loading is a finite activity: once US warehouses are full, the import surge should slow, and mine disruptions tend to resolve over time. What doesn't resolve as easily is demand tied to the energy transition, which suggests copper's longer-term floor has shifted higher even if near-term prices eventually pull back from record territory.
Sources: investingLive, Crypto Briefing
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