Copper prices poised for further gains as demand grows, supply gap widens: QNB

Doha, Qatar - Qatar National Bank (QNB) predicts copper prices will keep rising due to increasing global demand, driven by the energy transition and artificial intelligence infrastructure, while supply side limitations hinder meeting rising demand. Despite copper prices hitting a three-year high of $6.20 per pound, they are still below their 2008 super-cycle real levels, leaving room for price increases.

The report highlights that China's urbanization boom in the previous cycle sparked unprecedented industrial copper demand. Unlike gold, copper prices have generally followed US inflation, indicating that current prices may not reflect structural demand growth. The global energy transition is the strongest, most sustainable driver of copper demand, with renewable energy technologies requiring 2-5 times more copper than traditional fossil fuels.

The electrification of the economy, a common factor in most decarbonization pathways, further strengthens the importance of copper. Additionally, the development of AI infrastructure is creating a significant new source of copper demand, particularly in hyperscale data centers. On the supply side, copper market constraints stem from limited growth in mine production, underperforming major producers, and insufficient capital expenditure in the mining sector.

Any substantial additional supply is unlikely to reach the market before the early 2030s, leaving a widening supply gap in the coming years that could support copper prices.