Copper just printed a fresh all-time high, and the story is no longer just about AI. The London Metal Exchange three-month copper contract settled at $13,943 per ton on Monday, breaking through the previous record close of $13,618 set on January 29 and posting its largest single-session gain in more than a month. COMEX copper futures pushed above $6.40 per pound, approaching the intraday peak of $6.61 set earlier in 2026. According to reporting from Bloomberg via Mining.com, the rally is being driven by a combination of structural demand and supply disruptions that are reinforcing each other in ways the market has not seen since the early 2000s commodity supercycle.

What is unusual about the current move is that it is happening despite the kind of geopolitical uncertainty that normally crushes industrial metals. The United States and Iran remain at an apparent deadlock over how to end the war and reopen the Strait of Hormuz, and President Trump just rejected Iran’s latest peace proposal as “totally unacceptable.” Equities have steadied. Oil has rolled over. Copper has decoupled from the conflict narrative and is now trading on its own fundamental story.

What Is Actually Pushing Copper Higher

The textbook explanation for copper’s run is the energy transition. Electric vehicles use about four times as much copper per unit as internal combustion vehicles. Renewable power systems and the grid upgrades required to deliver that power are copper intensive. Data centers and the hyperscale buildout for artificial intelligence have added a third structural demand pillar that did not exist five years ago.

But the marginal price action is now coming from the supply side. The Strait of Hormuz crisis has created a chokepoint problem for sulfuric acid, which is essential for copper refining. Roughly one-fifth of global copper production depends on acid leaching processes that consume more than one ton of sulfuric acid for every ton of copper produced. The Persian Gulf is one of the world’s largest sources of sulfur and sulfuric acid feedstock, and the closure of the Strait of Hormuz has disrupted those flows in a way that takes time to work through the supply chain.

Compounding the problem, China imposed a sulfuric acid export ban that runs from May through December and is removing roughly 3 million tons from the seaborne market. Chinese smelters are not selling acid to anyone outside the country, which means refiners in Africa, South America, and Asia that depend on imported acid are getting squeezed. That feeds back into refined copper availability and tightens the physical market further.

“The market has moved on from the impact of the US-Iran conflict, and copper has its own distinct price trend now,” Jia Zheng, a trading manager at Suzhou Chuangyuan Harmony-Win Capital Management, told Bloomberg. Her view is that tight supply and declining inventories in China are now the dominant drivers, not the geopolitical noise.

The Citi Forecast: $15,000 by Year End

Citigroup analysts have published one of the most aggressive forecasts on Wall Street, projecting copper could reach $15,000 per ton by the end of 2026. That would be roughly an 8 percent gain from current levels and a more than 20 percent increase from where copper started the year. The Citi case rests on three pillars.

First, the supply-side disruption from the Hormuz closure is structural, not transitory. Even if the strait reopens in the next few months, the acid supply chain takes quarters, not weeks, to rebuild. Smelters that have lost feedstock have to rebid for it on the world market against competing buyers, and Chinese supply is locked up until December at the earliest.

Second, the energy transition demand story remains intact. Global electric vehicle sales are still growing, and grid investment is accelerating in the United States, Europe, and India. The International Energy Agency projects copper demand will grow by roughly 50 percent over the next decade, and supply growth from new mines is structurally constrained because new copper projects typically take 10 to 15 years from discovery to first production.

Third, AI infrastructure is now a meaningful incremental demand driver. Hyperscale data centers require copper for power distribution, busbars, and cooling systems. The buildout that Big Tech is funding with hundreds of billions in capex translates into a measurable increase in copper consumption. Some analysts estimate that AI-related demand alone is adding 1 to 2 percent to annual global copper consumption growth, which sounds small until you remember that copper has been chronically undersupplied for several years.

Military demand is the fourth, less-discussed driver. Every Patriot battery, every THAAD interceptor, every missile-warning satellite, and every drone uses copper. The Pentagon’s $1.2 trillion Golden Dome program is just one example of the kind of multi-decade defense buildout that will keep copper bidding for years. Citi’s analysts have specifically called out “energy transition, AI, and military demand, along with supply constraints” as the four pillars supporting the bull case.

China’s Exports Are Telling a Different Story

One reason to take the bull case seriously is what is happening with Chinese exports. The country’s April headline export figure rose 14 percent from a year earlier, and clean-tech goods, which tend to be copper intensive, posted some of the strongest gains. Electric vehicles, solar panels, wind turbines, and batteries are all being shipped out of China at record rates. That means copper-containing finished goods are leaving the country even as China keeps acid feedstock home, which creates a double squeeze on the rest of the world’s copper inventories.

The dynamic has not gone unnoticed at the major commodities conferences. Last week’s Asia Copper Week in Hong Kong featured almost uniformly bullish takes from traders and miners. Copper is now up about 12 percent from the end of 2025, after sharp dips in the opening weeks of the Iran war when investors feared a serious economic shock. Those fears have not materialized in the way the bears expected, and the structural demand picture has reasserted itself.

Frequently Asked Questions

Why are copper prices at record highs in May 2026?

Copper hit record highs above $13,900 per ton on the LME because of a combination of structural demand from the energy transition, AI data center buildout, and military procurement, alongside acute supply disruptions from the Strait of Hormuz crisis and China’s sulfuric acid export ban that runs through December 2026.

How does the Strait of Hormuz affect copper supply?

The Persian Gulf is a major source of sulfur and sulfuric acid feedstock used in copper refining. Roughly one-fifth of global copper production depends on acid leaching processes that require more than one ton of sulfuric acid per ton of copper produced. The Strait of Hormuz closure has disrupted these acid flows in a way that takes quarters to rebuild.

What is Citi's copper price target for 2026?

Citigroup analysts project copper could reach $15,000 per ton by the end of 2026, which would be roughly 8 percent above current levels. The forecast rests on continued supply disruption, structural demand from the energy transition, AI infrastructure buildout, and military procurement.

How much copper does AI demand actually consume?

Hyperscale data centers require copper for power distribution, busbars, and cooling systems. Some analysts estimate that AI-related demand is adding 1 to 2 percent to annual global copper consumption growth. That sounds small, but copper has been chronically undersupplied for years, and incremental demand at the margin has an outsized effect on price.

Which stocks benefit most from rising copper prices?

Freeport-McMoRan (NYSE: FCX) is the largest U.S.-listed pure play. Southern Copper (NYSE: SCCO) and Antofagasta (LSE: ANTO) are the next largest. Diversified miners like BHP, Rio Tinto, and Glencore have major copper exposure. The Global X Copper Miners ETF (NYSE: COPX) provides diversified exposure to the sector.

What could pull copper prices back down?

The main bear risks are a sharper Chinese property slowdown, a global recession, or a faster-than-expected resolution of the Strait of Hormuz crisis that normalizes the acid supply chain. A Chinese regulatory crackdown on metals-backed financing has also created near-term volatility.