It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Sunday, May 24, 2026
CU
Bellwether industrial metal copper is trading like an AI stock
Copper, famed for tracking shifts in the global industrial economy, is trading like a high-flying tech stock as investors bet that skyrocketing power use for artificial intelligence will fuel a surge in demand.
The highly conductive metal that’s crucial for data centers and power grids has recently been moving in near-lockstep with stocks like Nvidia Corp. and ASML Holding NV. Prices climbed to a record close last week, then retreated as AI-related equities hit turbulence, and were rallying again on Friday as investors returned to the sector.
The gyrations reflect how copper’s exposure to all the transmission lines, transformers and electrical equipment needed to power AI has become a key pillar in the bullish outlook for the metal. For now, that’s outweighing mounting worries about the Iran war’s impact on the more traditional industrial bedrock of copper demand.
“This round of the rally is mainly driven by a structural AI-themed trade,” said Xu Shendi, director of base metal trading at DH Fund Management Co., one of China’s biggest hedge funds. She is neutral to bullish on copper’s outlook, and said further gains are likely to require a fresh wave of investor inflows into the tech sector, alongside tighter mine supplies.
AI isn’t the only force behind the rally. Investors have also been piling into hard assets like copper as a hedge against inflation, while chronic underinvestment in new mines sets the market up for a severe supply deficit.
“Commodities have gone from being an overlooked asset class to becoming increasingly attractive for multi-asset investors,” said Matt Miskin, co-chief investment strategist at Manulife John Hancock Investments. “This is really a three-legged stool for copper: AI demand, inflation hedging and a run-it-hot macro environment.”
Analysts vary widely on AI’s impact on copper demand, with estimates ranging from about 125,000 tons annually over the past three years to 1.1 million tons projected for data centers in 2025. Commodities trader Mercuria expects about 350,000 tons of growth this year, up from under 400,000 tons in 2025.
While that’s only about 2.5% of annual demand, Mercuria’s head of metals research, Nicholas Snowdon, told an industry conference in Hong Kong earlier this month that he expects the AI industry’s growth to be similar to that of China’s electric-vehicle and renewables sectors, which have become a major source of copper demand in less than a decade.
Still, some warn that the copper market is pricing in the demand uplift far too early.
Recent research by commodities brokerage Marex Group and Oxford University notes that while Microsoft Corp., Alphabet Inc.’s Google and Amazon.com Inc. have committed some $580 billion to US data center projects this year, the industry is running into formidable bottlenecks in securing labor, power, equipment and permits.
“For copper, it’s not really the data centers themselves that matter most — it’s the power generation and transmission network required to support them,” said Guy Wolf, Marex’s global head of market analytics. “The AI narrative is bullish for copper, but the actual metals demand is probably further into the future than many investors assume.”
Even so, Wolf noted that there are risks for traders thinking of betting against the rally, given the sheer size of recent inflows into technology stocks.
Copper’s surge has come as money managers have added about $14 billion in net-long positions in futures markets in London and New York so far this quarter. Over the same period, the combined market capitalization of Nasdaq-100 companies has risen by $7.8 trillion, according to calculations by Bloomberg News.
“We haven’t really seen this kind of institutional interest since the China supercycle,” Wolf said, referring to the years earlier this century when rapid Chinese growth led to a commodities boom. “Even a small portfolio allocation shift into hard assets can overwhelm the market.”
Bearish investors also risk being burned by the re-emergence of a lucrative trading opportunity linked to the risk that the US will impose tariffs on imports of the metal. Copper prices on New York’s Comex have jumped above those on the LME in recent weeks, allowing traders to capture the arbitrage by shipping cargoes to the US.
LME futures were trading at about $13,630 a ton on the LME on Friday, while Comex prices were about $400 higher. Orders to withdraw copper from warehouses tracked by the LME jumped the most since 2013, in a sign that traders may be looking to move stock into Comex warehouses to capture the higher prices.
That dynamic could end up triggering fresh bidding wars among buyers seeking to secure available metal, even in an environment where demand is weakening.
Earlier in the year, a rebound in Chinese demand had supported copper’s rally, with buoyant spending in power grids and the renewable energy sector offsetting losses from the property sector, which was the engine powering copper demand for much of the 21st century. But close-to-record prices are starting to deter manufacturers.
The US premium is “driving all the metal flows that way, and China’s fundamentals do not matter any more,” said Harry Jiang, a trading manager with China Base Ningbo Group. “China is increasingly a price taker, not a price setter.”
In the past, investors have often been caught out as swift downturns in spot demand in China have upended their bullish bets on future growth. But Matthew Fine, who started investing in copper miners after joining Third Avenue Management as a portfolio manager in 2017, remains confident that the long-term trajectory is higher.
Even factoring in new demand from the AI sector, copper demand is only likely to grow at 2.7% annually through to 2040, he said. But crucially, miners look increasingly unable to keep pace, as new projects grow scarcer and more expensive to develop.
“AI may be the latest component of evolving demand, but the projected growth rates are no different than they’ve been for 125 years,” he said. “We look like, as a planet, we’re going to be short in a real way pretty soon.”
Trafigura withdraws huge volumes of copper from LME warehouses
Trafigura Group has moved to withdraw hundreds of millions of dollars of copper from London Metal Exchange warehouses as lucrative trading opportunities emerge in the US and China, according to people familiar with the matter.
The trading house was the main party involved in orders to withdraw more than 51,000 tons of copper from LME warehouses in the US and Asia on Friday, said the people, who asked not to be identified due to the commercial sensitivity of the matter.
The orders — which were the largest seen on the LME since 2013 — come as copper futures on New York’s Comex have surged above prices on the LME, creating a huge incentive for traders to deliver copper into the US.
Comex contracts have been trading at a premium over the LME for most of the past year, due to the possibility that the Trump administration will impose tariffs on the metal. Record volumes of copper were shipped to the country last year as traders cashed in on the arbitrage, and Trafigura’s withdrawal of stock is a sign that the seismic trading opportunity is gaining new momentum.
More than 30,000 tons of metal was ordered out of LME warehouses in New Orleans and Baltimore on Friday, and they’re likely to be delivered into Comex warehouses or to end buyers in the US market, the people said. The trading opportunity exists because Comex copper prices are inclusive of duties, while LME prices aren’t.
Nearly 20,000 tons of copper was also withdrawn from LME warehouses in Asia. While the US could be an attractive destination for some of that metal, rising prices in China are also creating incentives to ship copper there too.
With LME prices trading around $13,660 a ton on Friday, the total value of the metal that’s been ordered from the exchange is more than $700 million.
A spokesperson for Trafigura declined to comment.
(By Mark Burton and Jack Farchy)
Zambia’s Konkola reopens Chingola copper mine after 18-year shutdown
Nchanga mine in Chingola, in the Copperbelt Province of Zambia. (Image courtesy of Wikimedia Commons)
Zambia’s Konkola Copper Mines resumed mining at its Chingola “B” Mine on Thursday, 18 years after operations ceased, as Africa’s second-largest copper producing nation pushes to more than triple its annual output to 3 million tons by 2031.
The mine, part of the Nchanga mining complex, is projected to produce more than 200,000 tons of ore per month, KCM chief executive Deshnee Naidoo said in a statement.
The mine produced about 60,000 tons per month at an average grade of 2.5% between 1980 and 2003.
KCM, 79.4% owned by Vedanta Resources and 20.6% by Zambia’s state investment company ZCCM-IH, operates mines and processing plants in Chingola, Chililabombwe, Kitwe and Nampundwe.
Zambia produced 890,346 tons of copper last year, below its 1 million tons target.
(By Chris Mfula; Editing by Olivia Kumwenda-Mtambo and Peter Graff)
Codelco eyes $2 billion gain from unifying copper mines in Chile
Codelco is seeking a combined $2 billion in cost savings and additional revenue by integrating the operations of three copper mines as the state-owned Chilean company tries to offset the impact of stagnating output and rising debt.
The plan to integrate the Chuquicamata, Radomiro Tomic and Ministro Hales mines in the north of the country was recently presented by management to Codelco’s board of directors, according to people familiar with the situation, who asked not to be identified discussing confidential information
The plan envisages gains beginning to kick in as soon as 2027 as a result of unifying operational planning for the mines and sharing processing plants, possibly under a single management structure, the people said. Codelco didn’t immediately respond to requests for comment.
The proposed mine integration is part of a company-wide, four-year production plan that Codelco intends to present to the government in the coming months.
Like other copper producers, Codelco is facing inflationary pressures that have eroded the benefits of record prices for the metal. War in the Middle East has driven up the cost of energy and sulfuric acid, a key input for copper processing. Declining ore grades are also forcing producers to process a greater volume of rock to maintain output.
The need to improve efficiency is especially acute for Codelco given its heavy debt load and spending commitments. The company is already busy integrating a central Chile operation with an adjacent Anglo American Plc mine, and it increasingly relies on private-sector partnerships for exploration projects.
The proposed reorganization at Codelco’s northern mines would include sending ore from one pit to another’s plants and blending material to better align with customer needs, according to the people. One option would entail cutting management roles, although on-the-ground teams would remain intact, the people said. Talks with unions are already under way.
(By James Attwood)
India’s top copper producers oppose inclusion of scrap-based rods in standards
India’s top copper producers, including Adani, Vedanta and Hindalco, are opposing plans to make copper wire made by secondary refiners acceptable under government quality standards, saying products made from scrap pose safety risks.
The dispute has triggered a months-long standoff between large primary producers and smaller refiners over fire-refined high conductivity (FRHC) copper rods, which are mainly used in electrical applications such as transformers, power cables and wires.
Large producers argue that copper rods from smaller refiners, which mostly use scrap as raw material, should not be under the same standards because the products may not consistently meet the purity levels required for electrical applications.
“Indian fire (secondary) refiners may not have the requisite technology and hence are incapable of manufacturing the FRHC grade consistently,” the large producers said, according to the minutes of a March 23 meeting of the Bureau of Indian Standards (BIS) that was reviewed by Reuters.
The state-run BIS oversees product quality standards in India.
“Many of the manufacturers are not refining and just re-melting scrap to make substandard product,” the minutes said of the views expressed by the Indian Primary Copper Association (IPCPA).
The IPCPA’s partners include Adani, Vedanta, Hindalco and Hindustan Copper.
In the minutes, secondary producers defended their production method, saying fire refining is used to control the chemical composition of copper and meets conductivity requirements used internationally for cable manufacturing.
The BIS did not respond to requests from Reuters for comment.
IPCPA president Rohit Pathak said the industry body was seeking separate standards for FRHC copper because “fire refining which uses copper scrap as the primary input, cannot remove impurities to achieve 99.99% purity required for electrical applications.”
“Lower purity will increase overheating and fire risks. A separate standard will help ensure safe usage,” Pathak, who is also CEO of Hindalco’s copper business, told Reuters in a statement.
India’s total demand for copper rods in the fiscal year to end-March 2025 was estimated at 1.2 million metric tons, of which imports accounted for 0.1 million tons, while FRHC copper rod production stood at 0.4 million tons, according to industry estimates.
Imports are mainly sourced from the United Arab Emirates, although supplies have been disrupted this year by the Middle East conflict.
As a result of the dispute, about 400,000 tons of copper wire rod is currently being traded outside the quality control regime, an industry source said.
(By Neha Arora; Editing by Mayank Bhardwaj and Raju Gopalakrishnan)
CHART: Copper price surge mints 23 new unicorn mines
Tech venture capitalists invest in startups and get to call them unicorns. The official definition of a unicorn is a startup with a $1 billion valuation while still a private company. There are 1,765 unicorns globally, past and present.
MINING.COM believes the mining industry deserves a similar category of company to catch the imagination of the mainstream investor and compete against Silicon Valley, crypto and hyperscalers for smart (and dumb) investment dollars.
If we must, and it appears we do, we need to think of mines as the apps of the industrial economy (submissions for a better analogy welcome). Physical AI is, unfortunately, already taken.
While we’re at it, might as well rebrand junior mining. Let’s call them startups to attract more outside/bluesky capital from the likes of the Softbank Vision Fund, which, I’m happy to remind readers, invested $300 million in Wag!, a dog walking app that helpfully keeps you updated in real time about your pet’s excretions. (The app survived, the company didn’t.)
Even mining startups that have hastily added Critical Minerals to their names, or better still, Rare Earths (greater crustal abundance than copper to be fair so not that much of stretch) struggle to attract funny money from the Masayoshi Sons of this world.
Miners need to find a way to compete with world-changing companies like Opensea, a now defunct marketplace for Bored Ape Yacht Club NFTs, which peaked at a $13 billion valuation. Which is more than Ivanhoe Mines is worth today, sorry to say.
Copper is so hot right now and it seems apt that the second MINING.COM list of unicorns is also based on the bellwether metal. Data centres need copper by the block cave full (Cu can account for nearly 6% of initial outlays) and will help the industry siphon off some of the trillions of dollars flowing into compute.
The MINING.COM Unicorn Index does not seek to compare orange metal apples with tech apples. How can it? Mining simply has no equivalent to the $1 billion bike-sharing startup and NI 43-101 makes rug-pulling difficult, although not for lack of trying.
Last week copper set a new record at $6.667 a per pound, or $14,700 a tonne. Based on 2025 mine-level production numbers, at that price 75 mines throw off a nominal $1 billion or more per year just from the copper (and quite a few now do so at negative cost thanks to copper mining’s least best kept secret – byproduct credits). That’s 23 more than MINING.COM’s previous rainbow of unicorns.
Ministro Hales copper mine. (Image courtesy of Codelco | Flickr.)
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