Copper price skyrocket approaching $12,000! AI data centers ignite a "red metal" battle, supply chain has sounded the alarm.

It is noted that due to the soaring demand for data centers required for artificial intelligence and the tight supply, coupled with shortages outside the United States, the price of copper is approaching the $12,000 per ton mark. Copper wire is highly valued for its excellent conductivity and is crucial for powering the infrastructure needed for data centers, electric vehicles, and energy transition. Due to mining interruptions and hoarding in the United States, copper prices have risen by 35% so far this year, heading towards the largest increase since 2009. On Friday, the price of copper touched $11,952 per ton. Dan De Young, analyst at Benchmark Mineral Intelligence, stated, "Investors looking to capitalize on the benefits of AI will also buy financial products, which include hard assets that power data centers. Investors will purchase copper-related assets, such as ETFs." Canadian asset management company Sprott launched the world's first physically backed copper exchange-traded fund (ETF) in mid-2024. The fund holds nearly 10,000 tons of physical copper and has surged by nearly 46% this year to nearly $14 CAD per unit. A survey of analyst forecasts shows a shortage of 124,000 tons in the copper market this year, and a shortage of 150,000 tons next year. Billions of dollars are being invested globally in grid modernization and expansion, which is driving copper demand growth. Data centers and clean energy require a significant amount of power. Energy transition, including renewable energy technologies like wind power and CECEP Solar Energy, is also expected to boost copper demand. Macquarie expects global copper demand to be 27 million tons this year, a growth of 2.7% from 2024, with the largest metal consumer, China, seeing a demand growth of 3.7%. The bank predicts a global demand growth outside of China next year to be 3%. Analyst Alice Fox from Macquarie stated, "Bullish sentiment is being driven by the narrative of tight supply and is supported by macro news flow." Global stocks are being "sucked" towards the United States Supply interruptions include accidents at Freeport-McMoRan's giant Grasberg mine in Indonesia in September, while miners such as Glencore have lowered their production guidance for 2026, reinforcing expectations of tight supply. The total amount of copper stored in warehouses of the London Metal Exchange, U.S. Comex, and the Shanghai Futures Exchange has risen by 54% so far this year, reaching 661,021 tons. With Comex prices higher before President Trump planned to impose import tariffs, traders have been shipping copper to the United States since March. Higher prices are needed to cover import tariffs. Comex's stocks have reached a historical high of 405,782 tons, accounting for 61% of the exchange's total stock, compared to 20% at the beginning of 2025. De Young of BMI said, "There's a feeling of extreme supply tightness because all these materials are flowing to the United States." Refined copper received a 50% import tariff exemption that took effect on August 1, but the United States' taxation on the metal is still under review, with the latest results expected to be announced in June.