Copper is making a comeback to the forefront of the technology conversation, but not because of a new chip or software innovation: it’s due to its essential and irreplaceable physical role in the infrastructure supporting the digital economy. As Artificial Intelligence accelerates the development of data centers, electric vehicles gain importance, and countries speed up the modernization of their electrical grids, the copper market is experiencing tension… and forecasts suggest this pressure could last until 2026.
The scale of this movement is significant: in 2025, the price of copper in London reached highs of around $11,952 per ton, closing the year with an increase of nearly 35%. Several factors are converging behind this surge: expectations of structural demand and, simultaneously, supply issues caused by mine disruptions and operational restrictions affecting the pace of supply.
Why the AI boom is also a copper boom
Although it may seem counterintuitive at first, AI models do not just “consume GPUs”: they consume electricity and, more importantly, infrastructure to move that electricity safely and efficiently within buildings that concentrate unprecedented power densities. This translates into miles of wiring, distribution busbars, electrical panels, transformers, grounding systems, and countless components where copper remains the standard material due to its conductivity, reliability, and industrial maturity.
This wave is complemented by electric vehicles, which have more wiring and power electronics than combustion engine vehicles, plus an additional reality: electrical networks need reinforcements to handle increased demand, integrate renewables, and electrify entire sectors. In short, growth depends on three interconnected drivers, not just one.
Market signals: price forecasts and shortages until 2026
Analysts are not speaking of an isolated “peak,” but rather a scenario where supply and demand remain tightly balanced. Reuters, for example, reports a market consensus that the global refined copper deficit could be around 150,000 tons in 2026 (and 124,000 tons in 2025), a context that typically sustains high prices.
Meanwhile, investment firms have projected numbers for 2026. JP Morgan estimates an average price around $11,000 per ton, with an estimated refined copper deficit of about 160,000 tons. Other forecasts based on surveys of analysts place the 2026 average close to $10,500 per ton.
Quick table: what the market is discounting for 2026
| Indicator (public reference) | Peer estimate for 2026 | Implication |
|---|---|---|
| Average price estimate (analyst consensus) | ~$10,500/ton | Sustained “high” prices, not just a quick rebound |
| Investment bank scenario | ~$11,000/ton | Expectations of additional tension in supply/demand |
| Refined copper deficit (cited estimates) | ~150,000–160,000 tons | Market is tight: more sensitive to any disruptions |
(Figures are third-party estimates; not price guarantees.)
Who benefits and who suffers if copper remains expensive
Beneficiaries (generally):
- Copper miners and projects if they can increase production without delays.
- Manufacturing industry (cables, connectors, electrical components) when they can pass costs to the final price and maintain margins, common in indexed or revisable contracts.
Those hurt (or under pressure):
- Data center builders and their supply chain (internal electrification, substations, connections), since part of the CAPEX becomes more expensive.
- Electric vehicle industry and electric equipment manufacturers if material costs are transferred to components.
- Network operators and utilities, facing multi-year investment plans heavily influenced by material costs.
In practice, copper alone does not break a project, but it can cut margins, force contract renegotiations, or accelerate sourcing strategies (such as forward purchases, financial hedges, supplier diversification, and when feasible, redesigns to reduce material).
Can copper be replaced?
In the short term, only to a limited extent. Aluminum is used in some segments (for example, overhead lines and certain conductors) due to cost and weight considerations, but it is not a universal substitute: it changes sections, connectors, losses, heating, and installation requirements. In environments with high electrical density (like data centers), safety, performance, and standardization often take priority, leaving copper very much in use.
Frequently Asked Questions
Why does the AI boom increase copper demand if everything “goes through fiber”?
Because the bottleneck isn’t just data: it’s electrical power. AI drives data centers with higher consumption and internal power distribution, requiring substantial amounts of copper in wiring, busbars, and electrical equipment.
What does a “refined copper deficit” mean and why does it matter?
It means demand exceeds the available supply of processed copper for industrial use. In tight markets, any disruption at mines or refineries can significantly impact prices.
Can copper prices drop quickly if the economy slows down?
Corrections are possible, but many analysts argue that part of the demand is structural (electrification, grids, data centers). Still, prices also depend on China, inventories, the dollar, interest rates, and supply events.
Where will a copper price increase be felt first: by consumers or companies?
Usually first by companies: electrical construction budgets, industrial equipment, components, and wiring. For consumers, the effect tends to be indirect (deployment, maintenance, and investment costs) rather than immediately visible on a bill.
via: Digitimes and Hellenic Shipping News