Copper Hits All-Time High Above $14,500 Amid Tariff Fears and AI-Driven Demand

Copper prices have surged to their highest-ever level on the London Metal Exchange, extending a weeks-long rally fueled by anticipation that the US may expand tariffs to imports of refined metal. Benchmark three-month futures on the LME gained as much as 0.8% to trade at $14,533 a ton, beating the previous record set in January. Copper's 17% rise this year, and a staggering 47% in the last 12 months, mark one of the sharpest bull runs in the metal's history.

The metal's advance has been underpinned by a long-term mismatch in supply and demand, with the world's ageing fleet of big mines struggling to keep pace with usage from data centers, renewable energy and power grids - a dynamic copper bulls have flagged for years as AI infrastructure buildouts accelerate. Trillions of dollars flowing into AI development require massive grid expansions, substations, and cooling infrastructure, all of which are extraordinarily copper-intensive.

But shorter-term factors have come to the fore too - especially the hundreds of thousands of tons shipped to the US this year by traders seeking to profit from higher domestic prices. This tariff-driven arbitrage has pulled available inventories toward American warehouses, tightening supplies on other exchanges. Separately, mining hubs like Chile and Indonesia have also faced output disruptions this year, adding further strain to an already stretched physical market.

The rally has rippled through equity markets as well, lifting copper-linked stocks even during broader market corrections, as investors bet that the structural squeeze between shrinking supply and surging industrial demand is far from over.