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Copper anodes emerge from a furnace at the Canadian Glencore Copper Refinery (CCR) in Montreal, Quebec, Canada, Tuesday, August 12, 2025.
Bloomberg | Bloomberg | Getty Images
The price of copper is on track to experience its largest annual increase in more than a decade, driven by supply disruptionsa weakened US dollar, improve expectations for Chinese economic growth – and blockbuster spending on artificial intelligence.
Analysts believe the red metal’s rally could continue next year, especially amid supply fears and rapidly expanding global data center footprint.
Three-month copper prices on the London Metal Exchange, or LME, rose 1.5% to $12,405 per metric ton on Tuesday, paring recent gains after hitting a record high of $12,960 in the previous session.
The benchmark contract, up about 41% this year, is on track for its best year since 2009, when it gained more than 140% as countries emerged from the global financial crisis.
In New York, copper prices have climbed more than 40% since the start of 2025, also putting them on track for their biggest annual rise since 2009, when the contract rose 137.3%.
The demand for copper is widely considered an indicator of economic health. This base metal is of crucial importance to the energy transition ecosystem and is an integral part of the manufacturing of electric vehicles, power grids and wind turbines.
Indeed, electrification, network expansion and the construction of data centers all require large amounts of copper for cabling, power transmission and cooling infrastructure.
Ian Roper, commodities strategist at Astris Advisory Japan KK, pointed to the global boom in demand for AI as the latest driver of copper prices, with “very tight” markets likely to mean the red metal could advance further next year.
“The story of copper in recent years has been the story of green energy, right? Even though China has seen a huge downturn in real estate. [and] it hit things like steel demand, iron ore prices, it didn’t really affect copper,” Roper told CNBC’s Dan Murphy on Dec. 23.
“Copper has been a big beneficiary of the development of renewable energy, electric vehicles, and now, of course, data centers are the main growth driver,” he added.
AI and defense
JPMorgan analysts said in a research note released in late November that LME copper prices could have even more headroom next year, forecasting an average of $12,500 per metric ton in the second quarter.
The Wall Street bank said it expects copper to average $12,075 through 2026, citing growth in data center demand as an “extremely current” upside risk.
“Overall, we believe this unique dynamic of disparate inventories and acute supply disruptions tightening the copper market adds up to a bullish setup for copper and is sufficient to push prices above $12,000/ton in the first half of 2026,” Gregory Shearer, head of base and precious metals strategy at JPMorgan, said in the note.
Coils, wound copper wires, lie on pallets in the wire (winder) factory of Aurubis AG. After a casting and rolling process, the hot copper wire is wound in the winding machine to form a coil weighing up to five tonnes and measuring approximately twelve kilometers in length.
Alliance in pictures | Alliance in pictures | Getty Images
However, not everyone is as optimistic about the copper price outlook.
Analysts at Goldman Sachs Research expect copper prices to decline from recent highs, even as growing demand for the metal gradually pushes prices higher in the long term.
In a research note Published on December 11, analysts at Goldman Sachs Research said LME copper prices were poised to remain in the $10,000-$11,000 range as strong growth in global demand from the power grid and infrastructure sector, “supported by investments in strategic sectors such as AI and defense”, prevents prices from falling below $10,000.
Analysts said they expect LME copper prices to average $10,710 in the first half of 2026. Longer term, they expect LME copper prices to rise to $15,000 in 2035, noting that this figure is higher than the consensus of industry analysts.
