Copper Rebounds Toward Record High, Driven by Supply Risks and Industrial Demand

New York | EcoPulse24

US copper futures rose above $5.6 per pound, nearing the record high of $5.8 reached on December 26, aiming for annual gains of nearly 45% as traders moved to direct the metal toward the US market amid escalating global supply risks.

This strong rebound was driven by supply-side disruptions, following the suspension of operations at Freeport-McMoRan's Grasberg mine in Indonesia - which represents about 3% of global copper supply - after a fatal accident, intensifying concerns over production stability. Simultaneously, labor tensions in Chile and Peru, the world's largest copper producers, saw worker protests against extraction companies, raising the likelihood of further supply interruptions.

Geopolitical and trade considerations also boosted demand for copper storage in the US, after President Donald Trump threatened to impose tariffs on certain forms of copper, despite having previously excluded them from duties this year. This uncertainty led to significant copper inflows into US warehouses from major trading hubs in London and Shanghai.

On the demand side, copper continues to benefit from broad applications in electrification and clean energy technologies, amid increasing government commitments to shift away from fossil fuels. Capital spending on data centers and AI infrastructure is also expected to further bolster demand for the metal, given its crucial role in power grids and electronic equipment.

This performance underscores copper prices' sensitivity to global supply disruptions, alongside ongoing long-term structural demand tied to the energy transition and technological progress, keeping the industrial metal in focus for investors and global markets in the coming period.