Copper Prices Hit Record Highs as Chile, Congo and Indonesia Squeeze Supply

Copper prices hit record highs above $6.85 a pound and nearly $14,500 a tonne on the London market, driven by weak mine output in Chile, policy risk in Congo, and an AI buildout that requires copper for power infrastructure. Cochilco expects Chilean mine production to fall 2.0% in 2026 to about 5.3 million metric tons, while S&P Global's 2026 study projects global copper demand rising from 28 million metric tons in 2025 to 42 million metric tons by 2040, with a potential 10 million metric ton annual shortfall.

Copper is back at record levels, and the strain isn't coming from one dramatic shock. It's coming from weak mine output, policy risk in Congo, and an AI buildout that still needs old-fashioned wire. Copper has stopped behaving like a quiet industrial metal. Comex futures traded above $6.80 a pound in recent sessions, while MoneyWeek put the latest highs at more than $6.85 a pound and nearly $14,500 a tonne on the London market. That's not a normal move. It's the price of a market finding out, again, that supply can't be summoned just because data centers and carmakers all want the same metal at once, and grid operators are competing for it too. You can see the squeeze in the physical market too. Mining.com has reported that copper spreads have repeatedly moved into backwardation this year, the market structure that tells you buyers want metal now rather than later. LME inventories have been drawn down as the US has pulled in shipments to cover its own premium over London prices. The trade is simple enough: ship copper where the price is higher. The effect is less simple, because every tonne sent one way leaves another market thinner. That is why this rally feels different from a speculative pop. Traders can push a price around for a few days. They can't fix ore grades, restart a smelter, or rewrite a mining code by Friday. Chile is the real warning sign Start with Chile. According to Reuters reporting carried by Kitco, Cochilco expects Chilean mine production to fall 2.0% in 2026 to about 5.3 million metric tons before recovering in 2027. Chile still accounts for roughly 22% of global copper mine output. When the world's top producer misses, everyone feels it. Cochilco's reasons were plain: lower ore grades, scheduled maintenance, operational constraints and a weak start to the year. There is no mystery there. Mature mines get harder to work, and the easy tonnes are gone first. Codelco's El Teniente and Rajo Inca projects can help later in the year, but later is doing a lot of work in that sentence. Indonesia sits in the same category of supply risk, even where the timing is messier than traders would like. Freeport-McMoRan's Grasberg complex is one of the copper market's major pressure points, and Bloomberg reported last year that trouble at PT Smelting's Gresik facility had shifted ore and concentrate flows at a moment when smelters were already fighting for feed. That old outage shouldn't be dressed up as a fresh August shock. It still shows the real problem. One plant in the wrong place can change the balance for buyers thousands of miles away. Then there is Congo. MarketWatch noted this week that the Democratic Republic of Congo has imposed an export ban at a time when the country represents about 14% of global copper supply. That is not new. Congo's government has used export controls before, pushing miners to process more ore at home rather than ship raw concentrate straight out the door. You don't have to like that policy to understand it. Governments sitting on critical minerals want more of the value chain at home, not just royalties. For copper buyers, that's not just a pricing problem anymore. Contracts are about politics, permits and whether a minister decides raw material should cross a border at all. AI still needs metal Here's the thing Silicon Valley tends to skip over: the AI buildout doesn't run on chips alone. It runs on power. Power runs through copper. S&P Global's 2026 study, Copper in the Age of AI, projects global copper demand rising from 28 million metric tons in 2025 to 42 million metric tons by 2040. The firm also warned that, without major new mining and recycling, the market could face a 10 million metric ton annual shortfall by then. That's not a rounding error. That's an industrial bottleneck. Data centers are only one part of that story, but they're the loudest one right now. S&P Global expects copper demand from data centers to rise from 1.1 million metric tons in 2025 to 2.5 million metric tons by 2040, with AI training facilities making up 58% of data-center copper demand by 2030. Gartner has put the power side in equally blunt terms: worldwide data center electricity consumption is forecast to reach 565 terawatt hours in 2026, up 26% from 2025. Nvidia can sell the GPUs. Microsoft, Amazon and Google can lease the land. None of that changes the material bill. A new campus still needs cables, substations, transformers, cooling systems and grid connections before a single rack earns its keep. That is the part investors should not miss. Copper is not rising only because traders are excited. It is rising because the supply system is old, concentrated and slow, while the demand side keeps adding new claimants. AI is one. Electric vehicles are another. Grid upgrades and defense electronics are still in the queue too, and so is basic construction. The producers who could ease the market can't move quickly. Chile's recovery depends on mine performance improving through the year. Congo's policy risk is political by design. Indonesia shows the same thing: processing capacity can become the weak link even when ore exists. Copper buyers are left with a very physical problem in a very digital economy: the future needs more wire than the present market can comfortably supply. Also read: Nvidia's $53 Billion Startup Bets Are Quietly Landing In Your 401 k https://startupfortune.com/nvidias-53-billion-startup-bets-are-quietly-landing-in-your-401k/ • Platinum climbs back above $1,760 as a fourth straight annual supply deficit bites https://startupfortune.com/platinum-climbs-back-above-1760-as-a-fourth-straight-annual-supply-deficit-bites/ • Coherent Stock Drops 12% as AI Optics Investors Get Cold Feet Before Earnings https://startupfortune.com/coherent-stock-drops-12-as-ai-optics-investors-get-cold-feet-before-earnings/