Copper prices have surged approximately 50% over the past year, climbing from below $10,000 per metric ton to recently reach about $14,545 per tonne, according to analysis from Sprott Asset Management. Rather than following a traditional commodities cycle, the rally reflects increasingly structural supply constraints colliding with rising demand from power grids, artificial intelligence infrastructure and defence systems, according to analyst Jacob White. White noted that copper consumption patterns are fundamentally shifting away from traditional industrial cycles toward sectors driven by long-term government policy, national security priorities and sustained capital spending.
Chinese demand indicators remain mixed while elevated prices have pressured some fabricators, yet the metal continues setting records as supply constraints emerge across the copper value chain. Treatment and refining charges have collapsed dramatically as smelters compete for scarce concentrate. Charges have swung from more than $90 per metric ton in late 2023 to below minus $150 today, a reversal exceeding $240 per tonne that illustrates the severity of the upstream shortage.
Despite these deeply negative charges, smelters remain profitable through revenues from sulphuric acid, gold and silver by-products and other sources, allowing them to continue bidding aggressively for concentrate. Mine production continues to undershoot expectations across the industry. Disruptions exceeded long-term averages in 2024 and 2025, while recoveries at major operations including Grasberg and Kamoa-Kakula have taken longer than expected.
Chile, the world's largest copper-producing country, has lowered production forecasts after disappointing first-half output and now expects production to decline in 2026 before recovering in 2027. US tariff uncertainty is compounding the physical shortage by drawing refined copper into the country and reducing availability elsewhere. The US Commerce Department recommended in 2025 a universal tariff of 15% on refined copper beginning January 1, 2027, rising to 30% a year later.
More than 200,000 metric tons of refined metal arrived at US ports in July, the largest monthly inflow in data extending to 2014, as traders move copper into the country before any levy takes effect. London Metal Exchange inventories have fallen sharply and nearby contracts have moved deeper into backwardation, signalling buyers are paying a premium for immediately available copper. The shortage is supporting copper miners' profitability, with all-in sustaining cost margins reaching levels not seen in decades as smelters offer better terms for scarce concentrate while refined copper trades around record levels.
White cautioned that new supply remains years away, with major copper mines typically requiring 15 to 20 years to develop and substantial capital investment. Much of the project pipeline must replace declining production at existing mines before it can generate meaningful net supply growth. Artificial intelligence use is emerging as another long-term demand driver extending well beyond the copper contained inside data centres.
According to Sprott, copper miners gained just 0.22% in July before advancing 12.96% through August 10, while junior copper miners rose 15.06%. Source: Mining.com, August 19, 2026
Source: mining.com