Copper futures on COMEX touched a record $6.87 a pound this week, up around 19% so far this year, while the London Metal Exchange price hit a record $14,800 a metric ton. Charlie Cryer, chief executive of Oroco Resource Corp, says supply threats continue to outweigh threats to demand, even after a Reuters report on possible U.S. tariff delays knocked prices back on Thursday.
Copper hits record highs on tariff stockpiling
Copper futures on the COMEX exchange touched $6.87 per pound this week, up around 19% so far this year. The price on the London Metal Exchange reached $14,800 per metric ton, also a record. The U.S. price translates to around $15,141 in London terms, a premium that reflects buyers stockpiling ahead of tariffs President Donald Trump has threatened to impose on imports.
That premium showed signs of crumbling Thursday. A Reuters report citing two administration sources said the White House might be reconsidering the tariffs over affordability concerns, and the news sent copper futures down about 5% to the $6.57 level. But tariffs are just one, smaller part of the copper story.
AI infrastructure turbocharges demand
The original driver of copper's rise was electrification, as the world shifts away from fossil fuels. That demand was then turbocharged by the rapid build-out of artificial-intelligence infrastructure over the last couple of years. Data centers built by hyperscalers including Amazon, Alphabet, SpaceX and Meta consume large amounts of copper, mostly for power distribution, since electricity travels through copper and there is no physical substitute.
Charlie Cryer, chief executive officer of Oroco Resource Corp, regards these two narratives as structural, long-term propellants for copper unlikely to fade soon. Oroco, headquartered in Vancouver, owns a copper asset at Santo Tomas in northwestern Mexico, and Cryer says many of the opportunities and challenges facing his company mirror the industry at large.
Supply constraints deepen as ore grades decline
Ore grades have been declining for years as the world's best, most accessible sites are depleted, and there have been few major discoveries of 500,000 tons or larger recently, Cryer notes. Capex has also been in decline as infrastructure ages, a new mine can take 15 to 20 years to reach production, and rising interest rates make financing large projects harder. Adding to the squeeze, 50% of the world's sulfur supply transits the Strait of Hormuz, and a resulting shortage of sulfuric acid has cut output at copper mines that depend on it.
The International Energy Agency estimates worldwide demand will hit 42 million tons a year by 2040, with supply falling short by up to 12 million tons, according to a Bernstein Private Wealth Management report published in July. S&P Global separately projects a 24% supply gap by 2040, with the deficit becoming meaningful from 2035 onward.
Cryer's models currently assume a conservative long-term copper price of $4 per pound, though he expects that figure could rise. He warns that a pullback from tariffs, peace in the Middle East, or a derailing of the AI trade could each bring material price falls.
Source: MarketWatch
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