Copper’s New Squeeze: Fractured Markets, A.I. Demand And A Price Surge

Key Points

1. Copper is trading near record levels as London, New York and Shanghai prices climb together.
2. Distorted supply chains – from Chinese smelter cuts to U.S. stockpiling – are amplifying the rally.
3. Long-term demand from grids, EVs and AI data centres is pulling in investors despite overbought charts.

Copper opened this Monday near 5.47 dollars per pound on COMEX and about 11,700 dollars per tonne in London, a short step from May’s record.

Prices have climbed roughly three percent in a week, with Asian and European traders extending last week’s rally after stronger Chinese export data and another push higher on the London Metal Exchange.

This leg up is less a simple boom story than a tale of fractured markets. In London, trader Mercuria has earmarked more than 40,000 tonnes from Asian warehouses, helping drive a sharp backwardation and draining visible inventory.

The result is a market where cash copper screams scarcity even though global production has not suddenly collapsed. Across the Atlantic, the United States has become a magnet for physical metal.

Refiners and cable makers are paying a premium to the COMEX contract, helped by earlier tariff threats that encouraged stockpiling.

U.S. refined imports have more than doubled this year and warehouse stocks have swollen to around 394,000 tonnes, now the majority of exchange-tracked copper.

China, the world’s biggest consumer, sits at the other end of the pipe. Smelters that over-expanded during the cheap-money years are now squeezed by weak treatment charges and have agreed in principle to trim output by about ten percent.

Yet demand from power grids, electric vehicles and battery-grade copper foil keeps imports strong and factories busy. Behind the noise lies a simple arithmetic problem.

Banks now expect mine and refined supply to grow far more slowly than demand, reshaped by AI-hungry data centres and re-shoring of industry.

Investors see that mismatch. Copper-miner funds have drawn fresh money and prices ride the upper edge of their trading bands, with daily momentum gauges near overbought territory.

For governments tempted by heavy-handed intervention instead of clear, stable rules, this is a warning from the market’s most basic metal.