Summary
Copper futures climbed by 1.43% in morning trading to $6.553, briefly reaching $6.555 and drawing nearer to a 52-week high of $6.583. The move reflects an intersection of constrained supply and durable structural demand, with a set of disruptions to refining inputs and mine restart schedules reducing availability while demand from data centre-related construction and broader manufacturing remains firm.
Supply constraints tightening the market
Market participants have pointed to a supply squeeze originating in shortages of sulphur and sulphuric acid tied to the US-Iran conflict in the Middle East. According to traders' accounts, exports of these commodities have been effectively suspended from the region since March. Sulphuric acid is an important input for heap leaching and purification at many copper refineries. The shortage has, in turn, led China to suspend its own exports of related materials and prompted major Chilean refiners to reduce operating capacity, cutting available refined copper volumes.
Compounding these refining constraints, Chilean copper output fell by around 6% in the first three months of 2026 compared with the same period in 2025, a decline that predates the full effect of the acid shortage. The combination of lower refined availability and weaker mined output has tightened the physical balance.
A further material development on the mining side has amplified the bullish supply narrative. Freeport-McMoRan's Indonesian unit, Freeport Indonesia, has delayed the full restart of the Grasberg mine to early 2028. The postponement follows additional infrastructure work required after a September landslide. The company has adjusted its 2026 operating targets down to 65% capacity in the second half of 2026 and expects to reach 80% by mid-2027, reducing anticipated production over the near term.
Demand: technology and manufacturing lift copper use
On the demand front, several major technology firms continue to sign large-scale agreements that accelerate data centre construction, supporting copper's role in electrification and grid infrastructure. Broader industrial demand is also contributing, with activity in China described as robust and the manufacturing PMI rising to an over five-year high. These demand drivers are particularly relevant for a metal used extensively in power distribution, cabling and heavy electrical equipment where data centres and electrification projects require substantial copper volumes.
Market context and near-term dynamics
The price advance comes against a softer equity backdrop: the S&P 500 was down 0.43%, the Dow Jones fell 0.55% and the NASDAQ dropped 0.66% during the same trading window. Copper's relative strength amid weak broader markets underscores the influence of metal-specific fundamentals. Analysts cited the AI demand story and the persistent copper shortage as the dominant price supports, while noting that elevated interest rates could act as a near-term drag on momentum.
In sum, structurally constrained supply - driven by Middle East-linked acid shortages, Chinese export suspensions, reduced Chilean output and the Grasberg delay - paired with accelerating demand from AI and data centre-related investment, created a compelling fundamental case that pushed futures higher today even as equities traded lower. With essentially flat mine supply growth and production costs pushed up by Middle East energy disruptions, market participants see supply and demand factors favoring further upside in copper prices over the coming months.
Outlook
Traders and analysts will be watching developments in sulphuric acid flows, the pace of capacity restorations at Chilean refiners, and progress on Grasberg's infrastructure work. Equally, the trajectory of data centre buildouts and broader manufacturing activity in China will be key to demand expectations. Near-term interest-rate dynamics also remain a factor for market sentiment.