Copper Prices Rally Near Records on US Stockpiling Frenzy
A supply crunch and soaring demand from green energy and AI sectors are bolstering producers like Freeport-McMoRan and Southern Copper.
Copper is trading near all-time highs as the United States rapidly accumulates a massive stockpile of the essential metal, tightening global supply and signaling a bullish outlook for major mining companies.
Prices for the industrial metal, a critical component in everything from electric vehicles to data centers, have surged more than 20% this year. Early December trading saw copper futures on the London Metal Exchange (LME) peak at over $11,700 per metric ton, driven by a potent combination of persistent supply disruptions and surging demand.
This price strength is significantly influenced by a warehousing and arbitrage strategy unfolding in the U.S. market. Traders have capitalized on higher prices on the Chicago Mercantile Exchange (CME) compared to the LME, leading to a massive inflow of physical copper. CME-registered warehouse stocks have swelled from a low of 83,900 tons in February to over 335,000 tons, now exceeding the combined inventories of both the LME and the Shanghai Futures Exchange, according to data from MiningFeeds.
Benchmark Minerals Intelligence estimates that between 731,000 and 831,000 metric tons of copper are now “economically trapped” within the U.S., creating a de facto strategic stockpile. This localization of supply, spurred by market forces rather than direct government policy, is exacerbating a global supply deficit projected by some analysts to exceed 500,000 tonnes in 2025.
The supply side of the equation has been hampered by significant operational challenges. The abrupt termination of Panama's Cobre Panama mine concession in late 2023 instantly removed about 1.5% of global mine output. This has been compounded by declining production in other key regions and operational difficulties at Codelco, Chile's state-owned mining giant and the world's largest copper producer.
This tightening supply coincides with accelerating demand from the green energy transition and the explosive growth of artificial intelligence. Analysts at J.P. Morgan Global Research noted that AI data center deployments could add approximately 475,000 tonnes to copper demand in 2026, an increase of about 110,000 tonnes from 2025.
Major copper producers are direct beneficiaries of this market dynamic. Shares of Freeport-McMoRan (FCX), a global mining leader, have traded near their 52-week high of $48.78. The company, with a market capitalization of nearly $65 billion, is well-positioned to capitalize on the price surge. Similarly, Southern Copper Corporation (SCCO) has seen its stock approach its 52-week high of $144.25, reflecting investor confidence in its ability to leverage its extensive reserves in the Americas.
Looking ahead, market forecasts remain divided but lean bullish. J.P. Morgan projects copper could reach $12,500 per metric ton in the second quarter of 2026, while Citi has lifted its outlook to an average of $13,000 for the same period. However, some dissent remains. Goldman Sachs has expressed caution, suggesting that while the long-term fundamentals are strong, the current rally may be outpacing immediate market realities, citing adequate global supplies for now.
For investors, the sector's trajectory hinges on the delicate balance between constrained supply and the world's growing, and technologically advancing, appetite for copper.