Copper Hits 2-Year High on Supply Constraints and Green Demand
The red metal rallied to $9,850/tonne as mine disruptions in Chile and surging EV demand tighten the supply-demand balance.
Elena Vasquez
Commodities Editor
LME copper prices surged to $9,850 per tonne, the highest level since April 2024, as a combination of supply disruptions and structural demand growth from the energy transition squeeze the market.
Production disruptions at two major Chilean mines — including Codelco's El Teniente operation — have removed approximately 80,000 tonnes of annualized supply from the market. Chile accounts for roughly 25% of global copper production.
On the demand side, the International Copper Study Group estimates that EV-related copper demand will grow 22% in 2026, driven by battery electric vehicles requiring approximately 83kg of copper each — four times the amount used in a conventional car.
"Copper is the new oil of the energy transition," noted Elena Vasquez. "Every solar panel, wind turbine, and EV requires it, and the supply pipeline is woefully inadequate to meet projected demand."
China's copper imports rose 8% year-over-year in January, suggesting that stimulus measures are beginning to support physical demand. The Shanghai metal exchange reported declining inventories for the fourth consecutive week.
Freeport-McMoRan, the world's largest publicly traded copper producer, has seen its shares rally 18% year-to-date on the bullish supply-demand dynamics.