Copper prices surge to record $6.5 per pound amid tight supply and AI-fueled demand

Copper just hit a price that would have seemed absurd a few years ago. Comex copper futures climbed to a record range between $6.53 and $6.69 per pound in mid-May, driven by a perfect storm of supply disruptions, chemical shortages, and demand that shows no signs of slowing down.

The metal has risen more than 10% to 15% year-to-date, with some reports pegging the 2025 rally at nearly 40% at its peak.

What’s squeezing supply

Mine disruptions across major producing regions have constrained output at a time when the world desperately needs more of the stuff.

But here’s the less obvious bottleneck: sulfuric acid. About one-fifth of the world’s mined copper supply depends on sulfuric acid for processing, and that chemical is currently in short supply.

China, the world’s largest copper refiner, has seen weaker refined output, adding another layer of tightness to global markets.

Demand that won’t quit

Three mega-trends are converging to make copper one of the most sought-after commodities on the planet.

First, power grid upgrades. Aging electrical infrastructure across the US, Europe, and Asia needs massive investment. Second, renewable energy. Solar panels, wind turbines, and battery storage systems all require significantly more copper per unit of energy produced than fossil fuel generation does. Third, artificial intelligence. AI data centers are extraordinarily power-hungry facilities, and every megawatt of capacity they add requires copper for wiring, cooling systems, transformers, and grid connections.

China remains a dominant source of buying activity, supported by its own infrastructure investments and manufacturing output.

The tariff wildcard

Expectations for potential US tariffs on refined copper imports have created a significant price premium for Comex futures compared to London Metal Exchange pricing.

The premium also incentivizes physical copper to flow toward the US market, which could tighten supply elsewhere and push LME prices higher over time.

What this means for investors

Mining stocks and copper-linked ETFs have already responded to the price surge. A nearly 40% move in a single year is the kind of rally that invites profit-taking.

The structural demand story, however, is hard to argue with. AI infrastructure spending is accelerating. Renewable energy targets are getting more ambitious, not less. Grid modernization programs span multiple years.