LME copper prices surged to a record high of USD 14,779 per ton, while SHFE copper rebounded above the RMB 110,000-per-ton threshold. As copper acquires dual attributes—as both an industrial metal and a computing-power resource—what impact does this have across industries?

A stark illustration of tightening mine supply is the collapse of refining treatment charges (TC): the import copper concentrate TC has plunged below the historic low of USD -200 per ton, causing smelters to incur losses the more they refine—further constraining the elasticity of refined copper supply. Institutions have thus begun pricing in a 'supply inflection point' ahead of time: UBS Wealth Management forecasts the global refined copper deficit will widen from 219,000 tonnes in 2026 to 379,000 tonnes in 2027; Morgan Stanley predicts a deficit of approximately 600,000 tonnes in 2026—'leaving virtually no buffer.' Divergent conditions across the industrial chain intensify institutional long–short positioning. As a leading domestic copper company listed on China’s A-share market, the aforementioned firm told reporters from Yicai News that although copper prices continue hitting new highs, its day-to-day operations and production remain largely unchanged; the impact on earnings still hinges on the sustainability of elevated prices. Beneath these record highs, conditions diverge sharply across the value chain. Upstream mining firms benefit most directly: Yicai News notes that according to Guojin Securities’ statistics, output from 49 sampled Chinese copper enterprises totaled 8.196 million tonnes in the first half of 2026—a 4.3% year-on-year decline—while Chinese-owned copper firms posted a counter-cyclical growth of 1.2%. Wuyuan Securities’ latest research report concludes that supply tightening is the core driver behind copper’s successive price highs, while tariff-arbitrage opportunities generate a 'suction effect' at the policy level. Mid- and downstream players, meanwhile, grow increasingly cautious amid high prices: spot premiums have retreated, and some end-user enterprises have shifted to a 'produce-to-order' model. Fan Rui, Head of Nonferrous Metals Research at Guoyuan Futures, points out that price-induced demand suppression remains the largest variable undermining the bullish narrative. On the demand side, new drivers are replacing old ones. Morgan Stanley estimates that AI data centers consume roughly twice as much copper per unit as traditional data centers; global copper consumption by data centers is projected to reach ~740,000 tonnes in 2026 and climb to ~1.3 million tonnes by 2028. A battery-electric vehicle uses about four times more copper than an internal-combustion-engine vehicle; China’s new-energy vehicle sector alone is expected to require 1.84 million tonnes of copper in 2026. Regarding the incremental demand potential from AI-driven computing power, investment banks offer divergent estimates: Citigroup projects ~150,000 tonnes annually; JPMorgan forecasts 475,000 tonnes for 2026; and CICC’s Chief Commodities Analyst Guo Zhaohui sees it reaching as high as 1 million tonnes. UBS therefore judges copper is transitioning from a 'cyclical commodity' to a 'strategic resource,' with its pricing anchor shifting from real estate and infrastructure to power grids and AI computing capacity—endowing the copper bull market with structural, non-cyclical upside potential. On the actual demand pull from AI computing power, the aforementioned A-share company stated that it has not yet conducted any related internal statistics. In its view, the underlying demand for AI computing power still stems from copper foil used in printed circuit boards and grid-driven energy storage needs—'the fundamental demand remains here.' Market expectations regarding AI-related incremental demand may require further empirical validation. Bullish sentiment remains dominant: UBS Wealth Management forecasts copper prices could reach USD 15,500 per ton over the next few quarters—the most optimistic among major investment banks; Citigroup raised its short-term price target to USD 14,500 per ton and sets a 6–12-month target of USD 15,000 per ton; Guo Zhaohui believes current copper valuations are undervalued, with his target also hovering near USD 15,000 per ton. Goldman Sachs’ year-end 2026 target of USD 13,735 per ton has already been surpassed by current prices; its analysis indicates copper must rise to approximately USD 15,000 per ton by 2035 to stimulate sufficient new supply.

Copper: the 'oil of the AI era'

Geopolitical risk forms another foundational layer. Chile, Peru, and the Democratic Republic of the Congo—the world’s top three copper-producing nations—are all geopolitical hotspots. Strikes, coups, tax renegotiations, and mine expropriations are not black swan events—they are routine background noise in the copper mining industry. In 2022, Peru’s Las Bambas copper mine faced over twenty community road blockades within a single year, resulting in annual production losses exceeding 100,000 tonnes. Any such disruption leaves a discernible imprint on copper prices. This is why an increasing number of institutions refer to copper as 'oil for the AI era'—not because it burns, but because nothing runs without it; and its supply is constrained by geology, geography, and politics—not something that can be conjured out of thin air. III. Three overlapping demand drivers The structural mismatch between demand and supply has intensified dramatically, as three unrelated macro trends converge simultaneously—each representing a historically unprecedented demand shock. First: Energy transition. One figure merits special attention: a conventional internal-combustion-engine vehicle uses approximately 20–25 kg of copper; a battery-electric vehicle—across its drive motor, battery pack, charging controller, and onboard power systems—consumes 60–80 kg, roughly three times as much. With global new-energy vehicle sales approaching 17 million units in 2024, this single category alone adds copper demand equivalent to the entire annual copper consumption of a medium-sized country. Vehicles represent only one segment. Each megawatt of installed wind-power capacity requires about 2.5 tonnes of copper; offshore wind demands even more due to longer subsea cables. Photovoltaic inverters, energy storage systems, and high-voltage direct-current transmission lines—all rely heavily on copper. The International Energy Agency estimates that copper demand from electricity transmission and wind power alone will nearly double by 2035. Second: AI computing infrastructure. AI servers aren’t built with algorithms—they’re built with copper. Every megawatt of data center capacity requires 27–33 tonnes of copper—two to three times more than traditional data centers—due to higher AI computational power density, more complex cooling requirements, and denser internal cabling. Industry research firm CRU estimates global data center copper demand rose from 78,000 tonnes in 2020 to 260,000 tonnes in 2025, and is projected to exceed 650,000 tonnes by 2030. Those hyperscale AI data center campuses are even competing with grid operators for copper supplies. Tech giants’ bidding for critical equipment like transformers now exceeds public utility construction budgets—exerting pressure across the entire copper supply chain. Microsoft, Google, Meta, and Amazon collectively plan capital expenditures exceeding USD 650 billion in 2026, with a substantial portion allocated to physical infrastructure—whose structural skeleton invariably includes copper. Third: Military rearmament. This demand receives the least discussion—but is equally real. From bullet casings to jet fighters to missile guidance systems, modern weaponry contains large amounts of copper. Global defense spending entered a new expansion cycle after 2022, with NATO countries ramping up arms procurement, Asia-Pacific militaries accelerating modernization, and Middle Eastern conflict driving urgent weapons replenishment—all drawing from the same constrained copper supply pool. Three distinct demand surges, converging upon a single supply curve locked in by time.

Trafigura Says Hyperscaler Plans Signal AI Copper Use May Triple

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Trafigura estimates AI-driven data center construction could triple copper demand to 3 million tons by 2028, though skepticism remains on full project fulfillment. High prices are expected to encourage a 2 million-ton supply increase next year.

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