Copper outlook with further room for growth, says QNB

Copper has been a trusted indicator of global economic strength for decades, earning its nickname as "Dr Copper" for its ability to signal investment trends and industrial activity. QNB Economics has recently highlighted several factors that suggest the metal has ample room for further price growth. Currently trading around $6.20 per pound, copper has recently reached multi-year highs, and at its inflation-adjusted peak during the 2008 commodity super-cycle, it remains attractively priced compared to its historical highs.

Historically, copper has tracked US inflation rather than outpacing it, meaning its current valuation may still be underestimating the full extent of its demand expansion. The global energy transition is set to be the most significant long-term catalyst for copper demand. Renewable energy technologies like wind, solar, and hydropower require much more copper per unit of capacity compared to traditional fossil fuel-based power generation.

Grid modernisation, large-scale battery storage, and electric vehicle charging infrastructure also demand substantial copper inputs. Electric vehicles alone consume up to four times more copper than conventional internal combustion engine vehicles, and charging infrastructure adds to this demand.

Artificial intelligence has added a new dimension to copper demand. AI data centers, high-performance computing infrastructure, and advanced semiconductor facilities are increasingly power-intensive. This surge in electricity consumption is straining grids, prompting utilities to invest in expanded capacity and more resilient transmission systems, both of which are copper-intensive.

As industries adopt AI solutions, data centers are becoming a rapidly expanding source of copper demand, potentially rivaling electric vehicles in their long-term contribution to market growth.

Despite the demand surge, the copper supply side remains constrained. Copper mine production growth has plateaued in 2026, with major producers underperforming relative to capacity. The industry's underinvestment in capital expenditures, driven by the lengthy development timelines of copper projects (10 to 15 years), means that no significant new supply is expected to reach the market before the early 2030s.

Smelters and refiners are currently relying on scrap and secondary sources to maintain output, but this is merely a temporary solution. The widening supply-demand gap is not narrowing; instead, it is deepening, suggesting real copper prices remain below the 2008 super-cycle peak and creating ample room for further price increases.