A copper anode is removed from the furnace at the Glencore Canadian Copper Refinery (CCR) in Montreal, Quebec, Canada, on Tuesday, August 12, 2025.
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Copper prices are on track for their biggest annual price increase in more than a decade, driven by supply disruptions, a weaker U.S. dollar, rising hopes for China’s economic growth and massive spending on artificial intelligence.
Analysts say the red metal’s rally could continue into next year, especially amid supply concerns and rapid expansion of global data center footprint.
Three-month copper prices on the London Metal Exchange (LME) rose 1.5% to $12,405 a tonne on Tuesday, missing recent gains after hitting a record high of $12,960 in the previous session.
The benchmark contract is up about 41% this year, the fastest pace since 2009, when it rose more than 140% as countries emerged from the global financial crisis.
In New York, copper prices have soared more than 40% since the start of 2025 and are on track for their biggest annual increase since 2009, when the contract rose 137.3%.
Copper demand is widely considered to be an indicator of economic health. Base metals are critical to the energy transition ecosystem and are essential for manufacturing electric vehicles, power grids, and wind turbines.
In fact, electrification, power grid expansion, and data center construction all require large amounts of copper for wiring, power transmission, and cooling infrastructure.
Ian Roper, commodity strategist at Astris Advisory Japan K.K., cited a boom in global AI demand as the latest driver for copper prices, and said a “very tight” market was likely to mean the red metal could move higher next year.
“The talk about copper for the last few years has been green energy, right? There’s been a huge real estate recession in China, and even though that’s hurting steel demand and iron ore prices and things like that, it hasn’t really affected copper that much,” Roper told CNBC’s Dan Murphy on Dec. 23.
He added: “Copper has benefited greatly from renewable energy and building EVs, but of course now data centers are the big growth story.”
AI and defense
JPMorgan analysts said in a research note in late November that LME copper prices may have room to rise further next year, expecting them to average $12,500 a tonne in the second quarter.
The Wall Street bank expects copper prices to average $12,075 through 2026, citing growth in data center demand as a “highly talked about” upside risk.
“Overall, we believe the unique dynamics of disparate inventories and sharp supply disruptions tightening the copper market are sufficient to create a bull run in copper and push prices above $12,000 in the first half of 2026,” Gregory Shearer, head of base and precious metals strategy at JPMorgan, said in a note.
Coils, or coiled copper wire, are placed on pallets in the wire factory (coiler) of Aurubis AG. After the casting and rolling process, the heated copper wire is wound through a coiler into a coil weighing 5 tons and approximately 12 kilometers long.
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But not everyone is so bullish on the outlook for copper prices.
Analysts at Goldman Sachs Research expect copper prices to fall from recent highs, although rising demand for the metal will gradually push prices higher over the long term.
Analysts at Goldman Sachs Research said in a Dec. 11 research note that LME copper prices are expected to remain in the $10,000 to $11,000 range as solid global demand growth from the grid and power infrastructure sector “supported by investments in strategic sectors such as AI and defense” will keep prices below $10,000.
Analysts said they expect LME copper prices to average $10,710 in the first half of 2026. Looking further ahead, he predicted that LME copper prices would rise to $15,000 in 2035, which he noted was above industry analyst consensus.
