What next for the red metal as LME prices hit record

Copper is on track for its biggest annual price increase in more than a decade. supply disruptionsThe weakening of the US dollar, improving prospects for China’s economic growth and blockbuster spending on artificial intelligence.

Analysts say the red metal’s rise could continue next year, especially amid supply fears and a rapidly expanding global data center footprint.

Three-month copper prices on the London Metal Exchange (LME) rose 1.5% to $12,405 per metric tonne on Tuesday, paring recent gains after hitting a record high of $12,960 in the previous session.

The benchmark contract, which has increased by approximately 41% this year, is experiencing its best year since 2009, when it gained over 140% in value as countries emerged from the global financial crisis.

Copper prices in New York have risen more than 40 percent since the beginning of 2025, on track for their biggest annual increase since 2009, when the contract rose 137.3 percent.

Copper demand is widely considered an indicator of economic health. The base metal is critical to the energy transition ecosystem and is integral to the manufacturing of electric vehicles, power grids and wind turbines.

In fact, electrification, grid expansion, and data center construction all require large amounts of copper for cabling, power transmission, and cooling infrastructure.

Ian Roper, commodities strategist at Astris Advisory Japan KK, said the latest driver for copper prices points to a global boom in AI demand and that “very tight” markets will likely mean the red metal could rise further next year.

“The story of copper in the last few years has been green energy, right? Even though there was a big real estate crisis in China [and] “This has affected things like steel demand, iron ore prices, it hasn’t really affected copper that much,” Roper told CNBC’s Dan Murphy on Dec. 23.

“Copper has been a big beneficiary of the development of renewable energy and EVs, and now of course data centers are a big growth story,” he added.

Analysts at JPMorgan said: research note In late November, the LME published that copper prices may have more room to move next year, predicting an average of $12,500 per metric tonne in the second quarter.

The Wall Street bank said it expects copper to average $12,075 by 2026, citing the surge in data center demand as a “very present” upside risk.

“Ultimately, we think these unique dynamics in inventories and acute supply disruptions tightening the copper market are driving a bullish trend for copper and are sufficient to push prices above $12,000/mt in the first half of 2026,” Gregory Shearer, head of base and precious metals strategy at JPMorgan, said in a note. he said.

But not everyone is so optimistic about the outlook for copper prices.

Analysts at Goldman Sachs Research expect copper prices to decline from recent record levels, although rising demand for the metal will gradually push prices higher over the long term.

One research note Analysts at Goldman Sachs Research said in a Dec. 11 report that LME copper prices are poised to remain in the $10,000 to $11,000 range as strong global demand growth in the grid and energy infrastructure sector “underpinned by investments in strategic sectors such as artificial intelligence and defense” prevents prices from falling below $10,000.

Analysts said they expect LME copper prices to average $10,710 in the first half of 2026. Looking further ahead, the LME predicted copper prices to rise to $15,000 in 2035, noting that this was above industry analysts’ consensus.