Copper prices run signals deeper supply squeeze: Sprott
Mine shortages, shifting US trade flows and surging power investment are tightening an already stretched copper market.
Copper prices have surged roughly 50% over the past year, defying traditional commodity cycles and signaling a structural squeeze, according to Sprott Asset Management analyst Jacob White. The metal has reached approximately $14,545 per tonne, despite mixed economic indicators and a weaker US dollar. White attributes the rise to rising demand from power grids, AI, and defense, as well as supply constraints in the copper value chain.
Chinese demand indicators remain uncertain, while broader industrial activity lacks a clear cyclical catalyst. Copper consumption is increasingly driven by electricity networks, AI data centers, and energy infrastructure backed by government policy and long-term capital spending. Mine production has not met expectations, smelters have faced treatment charge collapses as they compete for scarce concentrate, and US tariff uncertainty has redirected refined metal into the country.
Copper miners have responded, with pure-play miners showing strong performance. The competition for copper concentrate has intensified, with smelters offering more favorable terms to secure material. Treatment and refining charges, which gauge the balance between available feed and processing capacity, have swung dramatically in favor of miners, making them more profitable.
The combination of scarcity and high copper prices is benefiting both copper miners and smelters, pushing all-in sustaining cost margins to decades-high levels. Power demand, US tariff uncertainty, and the potential for future duties are further compounding the situation, driving refined copper into the US and reshaping global trade flows.
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