Copper climbs 50% as AI data centers tighten global supply

COMEX copper traded near $5.65 per pound as of early 2026, up about 50 percent in a year, as AI data center construction and grid upgrades tighten global supply.

"Copper is the commodity best placed to benefit from the AI boom," Dan Yergin, vice chairman at S&P Global, said on CNBC's The Exchange, citing a convergence of geopolitics, policy, and demand.

Supply is constrained. Ore grades at legacy mines have fallen roughly 40 percent since 1991, and the International Energy Agency projects existing and planned mines can meet only about 70 percent of 2035 demand. Wood Mackenzie estimates a refined-copper deficit of 304,000 tonnes already materialized in 2025.

S&P Global's research projects a potential supply deficit reaching 10 million metric tons by 2040, with global demand set to rise 50 percent. The next demand signal is hyperscaler capital spending, with Microsoft, Google, Amazon, and Meta committing hundreds of billions to infrastructure buildouts.

AI Data Centers Absorb 27-33 Tonnes Per Megawatt

Large AI campuses are designed around power blocks of 50 to 150 megawatts, with copper consumption estimated at 27 to 33 tonnes per megawatt of installed capacity. A single 100-megawatt site can absorb several thousand tonnes before accounting for upstream grid reinforcements. BHP's case studies cite more than 2,000 tonnes for an 80-megawatt-class deployment.

Goldman Sachs estimates AI will drive a 165 percent increase in data center power demand by 2030. BloombergNEF expects cumulative copper locked into data centers to surpass 4.3 million tonnes by 2035, with AI-powered facilities averaging around 400,000 tonnes of copper demand annually over the next decade, peaking near 572,000 tonnes in 2028.

Supply Shocks and Tariffs Add to the Squeeze

Disruptions at the Grasberg mine in Indonesia and the Kamoa-Kakula mine in the Democratic Republic of Congo have reduced global refined output at a moment demand is accelerating. In China, copper inventories on the Shanghai Futures Exchange have fallen about 80 percent since March to their lowest level in two and a half years.

Trade policy adds another variable. The US imposed a 50 percent tariff on copper imports in August 2025, briefly widening the COMEX-to-LME spread to nearly 30 percent before it narrowed. The US is also considering import tariffs on refined copper starting in 2027, prompting suppliers to redirect shipments toward the US market. LME inventories are declining while COMEX trading volumes have risen more than 40 percent since the start of the year.

The Investment Case

For US investors, the direct equity play is Freeport-McMoRan, which reported $881 million in net income and $6.23 billion in revenue in Q1 2026, with Wall Street price targets ranging from $66 to $75 per share. Diversified exposure comes via the Global X Copper Miners ETF, up roughly 116 percent over the trailing twelve months, or the lower-cost iShares Copper and Metals Mining ETF.

Copper's bull case extends beyond AI. Electric vehicles require 2.9 to 4 times more copper than a conventional car, and BloombergNEF projects copper consumption from power transmission and wind energy to nearly double by 2035. Lean Research flags a base case of $11,000 to $12,500 per metric ton for 2026.

This article is for informational purposes only and does not constitute investment advice.