Copper at $6.41/lb — Up 37% Year-Over-Year
Copper is trading at $6.41 per pound ($14,135 per tonne) as of May 12, 2026 — up 37.3% compared to the same week last year and up roughly 7.3% over the past month alone. That kind of performance in an industrial metal typically signals one of two things: a commodity bubble, or a genuine structural shift in demand that the market is pricing with increasing conviction.
I view this as the latter. The copper bull case has three independent legs — AI data centers, EV electrification, and constrained mine supply — and all three are tightening simultaneously in 2026.
The AI Data Center Demand Math
The single most underappreciated driver of copper in 2026 is the data center buildout. Large-scale AI campuses require an estimated 27 to 33 tonnes of copper per megawatt of installed power capacity — wiring, busbars, transformers, cooling systems, and power distribution. A 150 MW hyperscaler campus consumes roughly 4,500 tonnes of copper. That is not a rounding error.
The global AI data center buildout is currently adding hundreds of new projects. By 2030, the Macquarie analysis estimates that AI data centers alone will consume 330,000 to 420,000 tonnes of copper annually, with demand peaking above 572,000 tonnes in 2028. The International Copper Study Group has already revised its 2026 global balance from a surplus of 200,000 tonnes to a deficit of 150,000 tonnes — a swing of 350,000 tonnes in one year.
The structural point here is irreversible: you cannot run a GPU cluster without copper. There is no substitution. Fiber carries data; copper carries power. Every $100 billion committed to AI infrastructure is effectively a copper purchase order.
EV Transition: The Second Demand Wave
While AI grabs headlines, the EV electrification story is a slow-moving but massive demand expansion. An electric vehicle requires four to five times more copper than a combustion-engine equivalent. Although per-vehicle copper intensity is declining as manufacturers optimize — from roughly 99 kg per vehicle toward 62 kg by 2030 — total EV volumes are growing far faster.
Wood Mackenzie projects EV-related copper demand to climb from 1.7 million tonnes per annum in 2025 to approximately 4.3 Mtpa by 2035. The charging infrastructure layer adds further demand: grid-scale EV charging requires copper for every cable, panel, and substation. By 2030, the copper deficit across all end-uses could approach 8 million tonnes annually — a structural imbalance no near-term mine pipeline can close.
Supply Constraints: Grasberg Is the Number to Know
The supply side of this equation has just gotten dramatically worse. In September 2025, approximately 800,000 tonnes of wet material flooded multiple levels of the Grasberg Block Cave mine in Papua, Indonesia — the world's second-largest copper mine, operated by Freeport-McMoRan. The force majeure declaration sent shockwaves through copper futures markets.
Freeport plans a phased restart of Grasberg production in Q2 2026, but the damage is deep. Nearly 600,000 tonnes of contained copper will be lost between September 2025 and end-2026 from Grasberg alone. Goldman Sachs cut its 2026 copper supply forecast by 200,000 tonnes specifically because of this event.
Beyond Grasberg, the structural supply picture is equally sobering. BHP's Escondida in Chile — the world's largest copper mine — is operating at record throughput but fighting grade decline. BHP has committed to a $5 billion concentrator upgrade at Escondida, but that project does not reach first production until 2031–2032. BHP guides its full copper portfolio to 1.9–2.0 million tonnes in FY2026 — strong, but against demand growth that easily absorbs incremental supply.
The copper project pipeline is long and expensive. New mines take 12–20 years from discovery to production. There is no short-term fix to mine supply constraints, and the Grasberg incident has simply accelerated a deficit that was already forming.
Mining Stocks: FCX, SCCO, BHP
Freeport-McMoRan (NYSE: FCX) is the purest-play copper stock and the most directly impacted by Grasberg. The company reported Q1 2026 net income of $881 million ($0.57/share, beating estimates of $0.46) on revenue of $6.23 billion. Average realized copper prices hit $5.78/lb — up from $4.44 in the prior-year quarter. Management guided full-year 2026 copper sales of 3.08 billion pounds, with operating cash flows of $8.7 billion at $6.00/lb copper. The stock touched a 52-week high of $70.97 before pulling back sharply on lowered guidance due to the Grasberg ramp-up uncertainty. I view the pullback as a buying opportunity within a multi-year copper bull market.
Southern Copper (NYSE: SCCO) delivered a standout Q1 2026: revenue of $4.25 billion (up 36% year-over-year) and net income of $1.58 billion ($1.92/share). SCCO's Peruvian and Mexican mines are performing well, and the company's low-cost structure gives it exceptional operating leverage to copper prices. SCCO's valuation commands a premium — it always does — but the earnings quality justifies a core position in any copper allocation.
BHP offers the most diversified exposure, with Escondida throughput records and a guided path toward 2 million tonnes of annual copper production. The Escondida concentrator upgrade is the most important copper infrastructure investment currently underway globally.
Bank Forecasts: Goldman vs. Citi
Goldman Sachs has taken a more cautious stance in recent months, setting a 2026–2027 price range of $10,000–$11,000/tonne ($4.54–$4.99/lb), reflecting their view of a partial surplus correction and tariff uncertainty. Their long-term target remains $15,000/tonne by 2035.
Citi is more bullish near-term, pricing copper above $5.90/lb by Q2 2026 ($13,000/tonne) based on structural supply constraints and AI/energy-transition demand. Citi's thesis aligns more closely with what we are actually observing — $6.41/lb is already above Citi's Q2 target.
My view is that the Goldman scenario underweights the Grasberg supply shock and the AI demand acceleration. The spot price action is telling you something the models have not yet fully priced.
Investment Conclusion
The copper supercycle thesis is not new — it has been discussed since 2020. What is new in 2026 is that the demand catalysts are simultaneously arriving while a supply shock has removed a material portion of near-term output. The math of AI data center copper intensity, EV ramp, and a 600,000-tonne Grasberg loss does not leave much room for the bearish scenario.
For investors, the key variables to watch are: the pace of Grasberg restart (any delay is copper-positive), the pace of hyperscaler CapEx commitments (Microsoft, Google, Amazon all guided higher for FY2026), and any China stimulus measures that could further accelerate EV and grid infrastructure demand — since China remains the world's largest copper consumer at roughly 55% of global refined demand.
FCX and SCCO are the core mining equity positions. Physical copper via COMEX or copper-focused ETFs provides direct commodity exposure. The downside scenario — a global demand shock, a China hard landing — would be the principal risk. But absent that, the supply-demand math for copper through 2028 remains one of the most compelling in commodities.
— Ruslan Averin, averin.com