Copper saw its strongest rise in months last week, nearing the record level set last year. On the London Metal Exchange (LME), three-month contracts gained 5.2%; on Friday alone, the price rose by 2.1% to US$10,715 per tonne – less than US$400 below the all-time high. Year-to-date, copper’s gains amount to approximately 22%. This momentum comes from a combination of supply disruptions, a weaker US dollar, and continued confidence in demand from energy transition projects and artificial intelligence data centers.
Copper: Numbers and Drivers of the Recent Rally
Over the past week, copper was the most notable base metal: The LME three-month contract recorded its largest weekly performance since the end of September last year. In the spot and futures markets, a familiar interplay is currently at work: a looser US monetary policy weighs on the US dollar, making dollar-denominated commodities relatively cheaper for buyers outside the US. At the same time, attention is growing for structural demand areas – from the electrification of transport and grid expansion to data centers for AI applications, which generate high electricity, and thus cabling and wiring, requirements. Overall, this supports the copper price and explains why traders see the record high within reach.
The fact that copper is trading less than US$400 per tonne below its peak underscores the momentum of the movement. Market participants are observing both macroeconomic impulses – interest rate levels, exchange rates, growth expectations – and industry-specific news that can influence short-term supply.
Supply Side in Focus: Force Majeure at Grasberg and further Disruptions
A key component of the current development is supply risks. For example, Freeport-McMoRan (FCX) declared Force Majeure for the Indonesian mega-mine Grasberg last month. (As we reported) Such reports fuel concerns that the physical availability of copper could temporarily be lower than planned – a factor that quickly impacts prices in tight markets. At the same time, there are increasing signs that other parts of the value chain are also not running smoothly.
Looking beyond copper, a similar picture emerges: Zinc prices rose by approximately 5% during the reporting week, reaching a yearly high on Thursday. Tin prices surged by 8.6%, driven by uncertainties regarding supply volumes from Indonesia. The parallel strength of several base metals is seen in the market as an indication that the supply situation remains tight in parts and that disruptions – such as weather-related interruptions, permitting issues, or logistics – are increasingly being priced in.
Demand Outlook: Energy Transition and AI Boom as Structural Pillars
On the demand side, copper remains the central building block for decarbonization. Electromobility, charging infrastructure, renewable energy generation, and especially grid expansion are considered multi-year themes with high metal demand. Added to this is the strong expansion of data centers for artificial intelligence: More server capacity means more power connections, transformers, cooling – and thus additional use of copper for lines, cables, and components. These structural drivers are independent of short-term economic fluctuations and provide an argument for why price declines have remained limited recently.
Macroeconomically, US monetary policy acts as a catalyst. With the resumption of interest rate cuts by the Federal Reserve, the US dollar has lost strength. Traditionally, a weaker Greenback favors commodities, as they become more affordable for buyers in other currencies. For copper, this means additional demand drivers that can quickly be reflected in the futures market.
Copper is currently benefiting from a rare confluence of supporting factors: supply-side bottlenecks, a weaker US dollar, and structural demand from energy transition and data centers. These factors have driven the LME price close to record levels. Whether new highs emerge from this depends on the further production and supply situation as well as the macroeconomic environment. For the copper market, the balance between short-term disruptions and long-term trends thus remains the central observation point.
At Goldinvest.de, given the longer-term outlook in the copper market, we have also been observing interesting copper companies for quite some time. These include, for example, the Australian
