Copper prices hit historic records amid supply shortages

Copper prices have reached historic highs, with 3-month contracts on the London Metal Exchange (LME) exceeding $14,800 per ton. On the Shanghai Futures Exchange, copper contracts rose to approximately $16,700 per ton. This surge represents a more than 16 percent increase since the beginning of the year, with some analysts noting a value gain of over 40 percent since last October.

The price spike is driven by a “perfect storm” of rising demand and lagging supply. Demand is fueled by the electrical industry, including electric vehicle production and power grid infrastructure. The International Energy Agency (IEA) estimates that by 2035, a potential supply deficit could reach 30 percent of requirements if new investments are insufficient.

On the supply side, mine production fell by 1.1 percent in the first half of the year, with significant challenges reported in Chile, Indonesia, and the Democratic Republic of the Congo. Additionally, trade uncertainties and tariffs, such as the 15 percent US tariff on copper products under Section 232, have impacted global market availability and shifted trade flows.