The industrial metal par excellence, copper, is chaining increases driven by a supply shock and also due to cuts and stoppages in deposits, which has caused available production to drop just when demand linked to electrical networks, renewables, electric vehicles and data centers keeps the pulse. On Thursday and Friday the LME reference touched $11,000 per ton, highs not seen since May 2024, and is accumulating a strong advance in 2025, also supported by a weaker dollar and expectations of rate cuts in the US, according to Reuters.
The photograph contrasts with precious metals, where the perception of risk and the search for refuge have taken gold above $4,000 per ounce and silver to an all-time high above $51, in a session of volatility marked by new trade tensions between Washington and Beijing.
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The clamp of supply: Chile, Indonesia, Congo
On the supply side, Teck Resources has again lowered its production guidance at Quebrada Blanca (QB), a project called to double its copper output but which has suffered operational setbacks. This adjustment, together with incidents in other operations of the group, has fueled the perception of short-term deficit.
Added to this is the declaration of force majeure in Grasberg (Indonesia), one of the largest fields in the world, which caused immediate increases in the price of the LME after the announcement of production cuts for 2025-2026.
In Kamoa-Kakula (DR Congo), flooding and seismicity forced a partial stop in May and a cut to the 2025 guidance, with a gradual resumption since June and normalization still underway.
The picture is completed with Chile, the world’s leading producer and where August data reflects a 9.9% drop in national production and a 25% drop in Codelco after an accident in El Teniente. The Chilean decline has been the largest in two years, adding tension to an already fair market.
Demand does not subside and investors enter the scene
Despite the rise in prices, demand remains supported by the electrification of the economy: electricity transport networks, renewable parks, vehicles and chargers, heat pumps, power electronics and the deployment of data centers. The monetary rebalancing that the market discounts (possible Fed rate cuts) also favors real assets. In parallel, financial flows towards copper have increased, increasing sensitivity to headlines and news about mines, warn sector analysts.
In precious metals, the rally in gold and silver is supported by that same macro cocktail (geopolitical risk, weaker dollar and expectations about the Fed) and investor appetite; Silver also adds a strong industrial component (photovoltaic, electronics), which amplifies its movements.
How does rising copper affect me?
It affects us in domestic repairs and trades, since copper is a basic material in pipes, electrical wiring and air conditioning. If the raw material becomes more expensive on a sustained basis, plumbing and electricity budgets may increase (especially where cables, panels or sections of pipe are replaced), because copper has a direct weight in the cost of the material.
On the other hand, it also affects appliances and equipment, since refrigerators, boilers, water heaters, heat pumps and air conditioners contain copper pipes and windings, which means that they can cost us more both in prices of new equipment and replacement parts.
Finally, the expansion and reinforcement of electrical networks (key to integrating renewables and the electric car) require kilometers of copper cable. A stressed market makes tenders and deadlines more expensive, and can have an impact on electricity tolls in the medium term if investment costs increase.
As with oil, peaks do not always move immediately and proportionally; It will depend on how long the supply tension lasts and whether the rate cuts alleviate the financial costs of manufacturers and installers.