Back to the Copper Age! Why stars have aligned to power a 10,000-year-old divine metal

Ten thousand years after early civilisations first forged tools from copper, hailing it as a divine metal for its transformative power, the red metal is back at the centre of the global economy. Copper prices have surged to an all-time high above $13,000 a tonne after a blistering rally that saw prices jump 61% on India’s MCX in 2025 and 42% internationally, with a further 7% gain already recorded in 2026.

Investors and industries alike are waking up to a simple reality: the world’s next phase of growth is once again being built on copper, and the momentum shows no signs of fading.

The price surge is being driven by a rare convergence of forces. Demand is being structurally reshaped by AI data centres, electric vehicles, renewable energy projects and power grid expansion, all of which are significantly more copper-intensive than traditional infrastructure. Even as China’s property sector struggles, consumption linked to electrification and digital infrastructure has proven resilient, creating a durable demand floor that markets are now pricing in.

Also Read | Copper prices near all-time high: Structural shift or speculative spike?

Copper Supply Squeeze

At the same time, global supply is under visible strain. A wave of mine disruptions, from force majeure at Indonesia’s Grasberg mine, which accounts for nearly 3% of global output, to strikes in Chile and operational setbacks in the Democratic Republic of Congo, has tightened availability.

“Copper is trading near its highs because the market sees a real supply squeeze instead of a short-term trade. LME inventories have dropped nearly 48% since the start of 2025,” says Naveen Mathur, Director – Commodities, Currencies and GIFT IFSC at Anand Rathi. “Deficits of over 100,000 tonnes are expected in 2026.”
The crisis has deepened this week. A strike at Capstone Copper’s Mantoverde copper and gold mine in northern Chile has renewed supply concerns, while Chinese copper producer Tongling Nonferrous has reported a delay in the launch of its Ecuadorian mine’s second phase. LME copper stocks have fallen to 142,550 tons, the lowest since November 17.The refined copper market is forecast to remain in deficit of 150,000 tonnes in 2026 amid a series of mine disruptions and lower ore grades. Ageing copper mines are becoming less productive while new investments remain prohibitively high and take years to materialise.

“Copper has surged to record levels above $13,000 per tonne amid tight supply, major mine disruptions and strong demand from electrification, EVs, AI data centres and grid upgrades, outpacing supply growth,” says Justin Khoo, Senior Market Analyst – APAC at VT Markets.

The Tariff Wild Card

Geopolitics has further amplified the rally. Fears that the US could impose tariffs on refined copper have diverted shipments into American warehouses, lifting COMEX inventories while draining stocks on the London Metal Exchange. With copper now on Washington’s critical minerals list, the metal is no longer viewed purely as an industrial input but as a strategic resource, embedding a geopolitical risk premium into prices.

“Traders are increasingly concerned that the Trump administration could introduce new tariffs on refined metals, diverting shipments into the US and leaving major trading hubs such as London and Shanghai short of supply,” warns Jigar Trivedi, Senior Research Analyst at Reliance Securities.

COMEX inventories have surged approximately 4.4 times compared to early 2025 as metal flows into US warehouses from major trading hubs in London and Shanghai, leaving supply tight outside the United States.

Demand Revolution

While supply crumbles, demand continues its structural shift. India’s copper demand is poised to accelerate as data centre capacity expands to 4-8 GW by 2030, while globally the energy transition shows no signs of slowing.

“Prices are also being supported by a robust global demand outlook, particularly from power grid upgrades, renewable energy projects, and data center expansion,” Trivedi notes. “In addition, expectations that the US Federal Reserve will deliver further interest rate cuts this year reinforced risk-on sentiment across financial markets.”

December’s Fed rate cut, persistent concerns over supply-side tightness and the prospect of further sectoral tariffs continue to fuel optimism for the metal. In top consumer China, continued policy support and ample liquidity are underpinning longer-term gains in copper prices despite the property market crisis.

The Road to $15,000?

Mathur sees prices potentially reaching $15,000 per tonne in the medium term. “Limited new mine supply, lower ore grades, and long project timelines are keeping the market tight,” he explains. “While short-term volatility is likely, price dips should attract buyers.”

Domestic brokerage firm ICICI Direct expects pullbacks toward Rs 1,050-Rs 1,000 levels on MCX to present accumulation opportunities, with targets of Rs 1,450-Rs 1,500 on the upside following 2025’s sharp rally. “Long-term bullish narrative remains intact for copper amid structural demand for copper from data center installations, EV, renewable energy projects and grid expansion,” the brokerage notes.

However, risks remain. The US adding copper to its critical mineral list has reinforced bets about potential increases in US import tariffs on refined copper, though any policy reversal by President Donald Trump could see copper stockpiles flowing back to global markets. Demand concerns from China may also weigh on prices as the Chinese economy faces weak domestic consumption amid a prolonged property crisis and deflation fears.

Can Copper Beat Silver?

Copper’s 2025 rally has outpaced many metals, prompting comparisons with silver’s strong performance, with many analysts calling copper the new silver.

“Unlike silver’s blend of industrial and precious-metal investment demand, copper’s surge is rooted in industrial fundamentals, energy transition, EVs and AI infrastructure,” explains Khoo. “It acts more as a barometer of global growth and electrification than a speculative store of value. Thus, copper is a structural growth metal, not a ‘new silver’ in monetary terms.”

Mathur agrees: “Copper isn’t really the new silver, but it’s rallying on genuine supply deficits and electrification demand, making it a strategic growth metal for the energy transition rather than a safe-haven trade.”

Khoo sees continued strength through 2026, with forecasts clustering around elevated averages, though volatility remains high and prices may oscillate before finding stable support. Key levels to watch include current highs around $13,000 per tonne and technical support near major psychological prices, with macro policy shifts, trade policy and mine output recovery influencing near-term trading ranges.

After 10,000 years, Dr. Copper, the metal that earned its nickname for diagnosing economic health, is delivering a prognosis the market can’t ignore: the future runs on red.