Copper Pushes to Fresh Highs on Data Center and Power Grid Demand

The AI and Electrification Connection

The 'high tech needs low tech' narrative is currently dominating the copper market. The massive power requirements of AI data centers, combined with the global shift toward electric vehicles and renewable energy grids, have created a non-cyclical demand base for copper. This structural change has helped the metal decouple from broader industrial cycles, allowing it to maintain record price levels despite global economic cooling.

Supply Constraints and Structural Tightness

On the supply side, the market is grappling with persistent disruptions. Recent issues at major mining sites, including Indonesia's Grasberg, have restricted the flow of refined copper. Analysts at Saxo and CME Group highlight that this supply tightness, combined with record average daily open interest in futures markets, suggests that the market remains fundamentally undersupplied heading into the new year.