The AI boom and tariff uncertainty are pushing copper prices to record highs

By John Towfighi, CNN

New York (CNN) — Tightening global copper supply, robust demand from the AI boom and uncertainty over tariffs are all whipping up a frenzy for the red metal. It’s sending prices soaring to their highest levels ever.

Copper futures traded in New York settled at $6.89 per pound on Wednesday, their highest level on record. In London, copper futures – measured by the metric ton – are also at record highs.

Known for being highly conductive, copper has wide applications across electronics, housing and autos. The red metal is a critical part of industry and construction, and its ascent to record highs could send higher prices rippling through to businesses.

Copper prices fell 5% on Thursday, pulling back from record highs, but analysts say fundamentals are in place for higher prices. Copper prices are up more than 15% this year, outpacing gold, silver, bitcoin and the S&P 500. Over the past 12 months, copper prices are up 40%.

Supply-demand mismatch

There is strong demand for copper from electric vehicle manufacturing to the infrastructure for powering AI data centers. Prices had already been on the rise in recent years as EVs ballooned in popularity in Asia and Europe. Now, the AI boom is adding to demand.

At the same time, there are concerns about lackluster copper production. Global copper mine output declined by 1.1% in the first half of 2026, according to preliminary data from the International Copper Study Group.

Poor weather and deteriorating mine quality are contributing to production woes. Chile, the world’s largest copper producer, saw a 6.6% decline in output in the first half of the year, according to ICSG.

To be sure, there isn’t a shortage of refined copper. There’s a global surplus of refined copper. But declines in mine production are raising concerns about tightening supply at a time when demand remains solid.

The tariff factor

President Donald Trump last year implemented a 50% tariff on semi-finished copper products. But traders are on watch for a potential 15% tariff on refined copper products, which would impact the market more directly.

Concerns about tariffs are creating distortions in the global market and contributing to higher prices, analysts say.

Massive amounts of copper have been shipped to the United States to try and get ahead of potential tariffs. The surge has been so large that it’s draining copper supply elsewhere, making copper less accessible globally and sending prices higher.

“People are stockpiling metal because they’re not sure whether Trump is going to impose copper tariffs or not,” Edward Meir, commodity analyst at Marex, told CNN. “If he imposes copper tariffs, people want to make sure they have enough metal to tide them over. So, there’s been a mad rush.”

While the supply-demand imbalance is in the background, the recent surge in copper prices is largely attributable to the tariff uncertainty, analysts say.

As the price of copper has rallied sharply, traders, hedge funds and other speculators tend to pile into the market to try and make a profit, Meir said. That leaves room for a potential drop in price if momentum goes in reverse, but the fundamental outlook is set to keep prices elevated.

Impact on businesses and consumers

Copper can be found in everything from cars to computers to the wiring in buildings. The rise to all-time highs means higher prices for businesses. The further copper prices rise, the more impactful it will become.

The cost of copper wire and cable, as measured by the Producer Price Index, rose about 18% year-over-year in July, according to data from the Bureau of Labor Statistics.

The impact on consumers depends on just how much copper is used in the products they purchase. How much consumers feel the pinch also depends on how much of the cost is passed through by businesses, according to Ewa Manthey, commodities strategist at ING.

“What’s most important is that copper’s longer-term outlook remains supported by constrained supply and growing demand from electrification, grid investment and AI-related infrastructure,” Manthey said. “These structural trends have tightened the market and provided a strong fundamental backdrop.”

The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.