Copper surged to a record high Thursday, with U.S. futures touching around $6.90 a pound before retreating into the close. Analysts say the rally reflects tight mine supply and disruptions rather than a broad pickup in global growth, complicating copper's old role as "Dr. Copper," the economy's bellwether.
U.S. copper futures climbed to around $6.90 a pound Thursday, a record, before retreating to end the session off its peak. The metal is used in construction, electronics, transportation and AI applications, and the move extends a rally already underway before Thursday's spike.
Instead of simply indicating stronger global growth, the record price could be reflecting a mix of constrained supply, heavy grid investment, uncertainty around U.S. tariffs and rising demand for electrification. William Osnato, Barchart's director of commodity data research and analysis, said the surge in copper demand is "more acute and not the traditional broad economic growth that supports copper", Osnato told CNBC in an email.
A supply story, not a demand story
Michael Widmer, Bank of America's head of metals research, said the move was really driven by copper supply rather than copper demand. He pointed to weak mine supply growth and disruptions that have added further constraints, including storms in Chile, the world's biggest single copper producer, where heavy snow, rainfall and high winds have disrupted mining operations. Setting up a new mine can take about 10 years, which also slows the response of supply.
Tariffs and export bans tighten the market
Potential U.S. Section 232 tariffs and China's crackdown on scrap copper availability have also tightened global supplies in 2026. Last year in June, President Trump signed a proclamation to impose 50% tariffs on imports of semi-finished copper products and copper-intensive derivative products. Thursday's move came only after news that the Democratic Republic of Congo officially banned copper and cobalt concentrate exports to encourage more domestic processing.
Grid investment and AI keep demand firm
Demand has stayed firm, tied more to electrification than to an economic boom. In the first half of this year, China's grid investment was up 13% year over year, and the country recently announced a plan to invest approximately $574 billion in power grid upgrades. Osnato said supply disruptions have been pushing consumers to pull metal out of London Metal Exchange warehouses, which is driving up refining costs.
Source: CNBC
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