Copper prices are once again approaching historic highs. The metal is trading at around 14,300 dollars per metric tonne on the London Metal Exchange, while global mine production risks stagnating for the first time since 2017. Several investors consequently expect prices to remain high.
The price is just below the record of 14,527.50 dollars per metric tonne reached on 29 January 2026. The development was reported by Kauppalehti, citing Bloomberg.
Copper is a critical material for power grids, data centres, buildings, vehicles and industrial equipment. Demand is expected to increase as investment in electrification, renewable energy and AI-related infrastructure continues.
The mining industry is struggling to raise production quickly. New copper mines require substantial investment and may take many years to develop. Existing operations are also affected by declining ore grades, technical problems and delays to expansion projects.
Chile reports sharp production decline
Developments in Chile are particularly important because the country is the world’s largest copper producer. During the second quarter of 2026, Chilean output fell by 7.7 percent from the same period a year earlier to 1.27 million metric tonnes.
It was the country’s weakest second quarter in a data series extending back at least 19 years. Lower output at several major mining companies contributed to the decline.
The problems continued during the summer. In July, Chile’s copper production fell by 9.4 percent year on year to just over 403,000 metric tonnes. Unfavourable weather in the north of the country and maintenance at major mining operations contributed to the reduction.
Chile has subsequently lowered its production forecast for 2026. According to Bloomberg, state copper commission Cochilco expects output of 5.27 million metric tonnes, representing a decline of 2.6 percent from 2025.
The figures illustrate how difficult it is for mining companies to respond to high prices with a rapid increase in production. As ore grades decline, larger quantities of rock must be mined and processed to recover the same amount of copper.
This requires more energy, water and equipment, often resulting in higher costs. Permitting procedures, local opposition and insufficient infrastructure can also delay new projects.
Demand expected to continue growing
Copper is used in almost every form of electrical infrastructure. Expanding power grids, charging stations, wind and solar farms, and battery systems requires large amounts of wiring and other copper-based equipment.
Data centres have also become an important source of demand. AI facilities require extensive power cables, transformers, cooling systems and new grid connections. Investment therefore drives demand both inside the data centres and across the surrounding energy infrastructure.
Expectations of a long-term supply deficit have made copper an attractive investment. Traders and funds are positioning themselves for limited availability to push prices still higher.
The rally has not, however, been driven entirely by physical demand. When the record was set in January, substantial speculative buying contributed to the increase, alongside investors being forced to close positions based on falling prices.
This creates a risk of sharp fluctuations. High inventories and periods of weak physical demand in China, the world’s largest copper consumer, have prompted some analysts to question whether the highest price levels are sustainable.
High prices could curb consumption
A sustained copper price above 14,000 dollars per metric tonne would have consequences far beyond the mining industry. Costs could rise for manufacturers of cables, transformers, electric motors and other electrical equipment.
Companies may try to pass these costs on to customers or replace copper with aluminium where technically possible. Aluminium has lower electrical conductivity but is cheaper and lighter, making it attractive for certain power lines and cable products.
High prices could also stimulate recycling and make additional mining projects economically viable over the longer term. The supply response would nevertheless take time, while weaker industrial activity or falling Chinese demand could affect prices much faster.
The market is therefore being shaped by two opposing forces. Electrification and constrained mining capacity support a high long-term price, while speculation, economic uncertainty and weak demand could trigger short-term declines.
Copper’s return towards its record level nevertheless indicates that the market has little room to absorb further production disruptions. Developments in Chile and other major producing countries will therefore be decisive for prices during the remainder of the year.
Sources: Kauppalehti, Bloomberg, Reuters and Mining.com.
