Full Breakdown
AI-Powered Demand Fuels Record Copper Rally
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Record Prices and AI-Linked Demand
Three-month copper on the London Metal Exchange reached an all-time high of $14,875 per metric ton in September, driven by tight inventories, tariff concerns and expanding demand from data-center and grid projects. Veteran commodities strategist Jeff Currie—formerly head of commodities research at Goldman Sachs and now co-chair of Abaxx Markets—argues that AI-related demand is setting up a commodity supercycle that could span a decade. Trafigura estimates AI and data-center construction could add up to 1 million tonnes of copper demand by 2030, while S&P Global projects data-center copper use to rise from 1.1 million metric tons in 2025 to 2.5 million by 2040. In response, Glencore has revised its 2026 production guidance to 810,000-870,000 tonnes, and Freeport-McMoRan is pushing 2026 concentrate terms above the 2025 benchmark of $21.25. Goldman Sachs Research notes that commodities will remain central to the U.S.–China geopolitical and technology competition.
Supply Constraints and Market Outlook
Copper settled 1.4 % higher at Rs 1,427.15, gaining Rs 19.7, as traders weigh mine-supply risks and tightening LME inventories, which fell to a six-week low of 233,025 tons. A union strike at Antofagasta’s Centinela mine in Chile threatens production from November, compounding a 12.8 % year-on-year decline in Chilean output for August. The International Copper Study Group reported a global refined copper deficit of 51,000 metric tons in July, down from 74,000 tons in June, while global refined production reached 2.41 million tons against consumption of 2.46 million tons. China’s Yangshan copper premium climbed to $135 per ton, the highest in four years, indicating stronger import demand post-holiday. Technical analysis points to immediate support at Rs 1,416.5, scheduled to be tested on May 5 (date ledger).
Silver Volatility at AI-Safe-Haven Intersection
Silver has become the most volatile metal, sitting at the crossroads of AI-driven industrial demand and traditional safe-haven flows. Metals Focus forecasts a sixth straight annual deficit in 2026 of about 46 million ounces, while Philip Newman, managing director at Metals Focus, warns that a liquidity squeeze could re-emerge if volatility, Indian demand and exchange-traded-product inflows align. Declining solar-panel usage—projected 19 % lower this year—offers a modest bearish offset, but AI-related data-center, electric-vehicle and grid demand continue to support industrial consumption.
Data & Statistics
- Record LME price: $14,875/ton (Sept.)
- AI-related demand add-on: +1 million t by 2030 (Trafigura)
- Data-center demand 2025-2040: 1.1 -> 2.5 million t (S&P Global)
- Glencore 2026 guidance: 810-870 k t
- LME inventories: 233,025 t (six-week low)
- Global deficit July 2024: 51,000 t (ICSG)
Why It Matters
The convergence of AI-driven infrastructure needs and constrained copper supply is reshaping commodity markets, influencing pricing, investment strategies and the broader U.S.–China technology rivalry. Silver’s dual role as an industrial input and safe-haven asset adds further complexity, underscoring how emerging tech trends can amplify traditional market dynamics.