Copper Rally Lifts Mining Stocks as Prices Breach $13,000 a Ton
Surging demand from AI data centers and tight global supplies are fueling a rally in the industrial metal, boosting producers like Freeport-McMoRan and Southern Copper.
A powerful rally in copper showed no signs of slowing as prices for the essential industrial metal surged past $13,000 a metric ton, propelling shares of major producers to new highs. The sustained price strength reflects a market grappling with tight supplies and a surge in demand from both the green energy transition and the booming artificial intelligence sector.
Major US-listed mining giants have been primary beneficiaries of the rally. Shares of Freeport-McMoRan (FCX), one of the world's largest copper producers, jumped nearly 4.8% in recent trading to $54.41, pushing past its 52-week high. Southern Copper Corp. (SCCO) also saw significant gains, rising approximately 3.8% to $154.39. This follows a banner year for Southern Copper, which saw its stock climb over 63% in 2025 on the back of soaring metal prices.
The rally is underpinned by a classic supply-and-demand squeeze. On the supply side, the market has been roiled by disruptions at key mines, including unplanned outages and regulatory hurdles that have constrained output. Freeport's own operations at the Grasberg mine in Indonesia faced setbacks in 2025, contributing to tighter global inventories. According to a report from The Wall Street Journal, these supply issues have created a fundamental tailwind for prices.
Simultaneously, demand for 'red gold' is accelerating. Beyond its traditional use in construction and manufacturing, copper is a critical component in electric vehicles, wind turbines, and grid infrastructure. More recently, an unexpected demand driver has emerged: artificial intelligence. The build-out of energy-intensive data centers required to power AI applications consumes vast amounts of copper, with some estimates suggesting they require up to five times more copper than traditional data centers, adding a significant new layer of demand to the market.
Analysts are increasingly bullish on the outlook, with many forecasting a continued structural deficit in the copper market. Analysts at J.P. Morgan have projected prices could reach $12,500 per metric ton in the second quarter of 2026, while strategists at UBS see the metal potentially hitting a record $13,000 by the end of the year. This optimism is fueled by expectations of a global refined copper deficit of around 330,000 metric tons in 2026.
Higher prices directly translate to expanded profit margins and robust free cash flow for producers like Freeport and Southern Copper, giving them greater capacity for capital returns to shareholders and investment in future projects. While some market watchers caution about the influence of speculative buying, the underlying fundamentals of a supply-constrained, high-demand market suggest a strong foundation for the copper sector heading into the new year.