Wedoany.com Report-Dec.25, Copper prices reached a new all-time high above $12,000 per tonne on Tuesday, December 23, 2025, on the London Metal Exchange. Benchmark prices climbed as much as 2% to $12,159.50 per tonne during the session, extending a strong rally that has delivered nearly 40% gains for the year. This performance positions copper for its largest annual increase since 2009.

The surge has been driven by supply disruptions at mines across the Americas, Africa, and Asia, which have limited output. At the same time, growing demand from sectors such as electrification, renewable energy, power grid upgrades, data centers, and artificial intelligence infrastructure has added upward pressure. Copper serves as a key material in these areas due to its conductivity and durability.

Brendan Smith, CEO of SiTration, said the current rally reflects a mix of near-term disruptions layered onto a longer-term supply challenge. He noted that while the market may not yet be in a full-blown deficit, recent outages at major mines, shifting trade risks, and accelerating demand tied to AI data centers have fueled heightened market enthusiasm.

In addition, limited local processing capacity in major mining regions like North America, South America, and Australia has increased reliance on foreign refining. This exposes the market to various risks and contributes to price volatility.

Traders have also responded to potential U.S. policy changes that could affect copper flows, leading to increased imports and stockpiling in certain regions. This has created competitive bidding for available supply among manufacturers in other markets.

Manufacturers have explored alternatives such as aluminium in some applications and drawn more scrap copper into circulation to help ease pressure. However, substitution remains limited in many uses where copper's properties are essential.

Albert Mackenzie, copper analyst at Benchmark Minerals, said earlier this month: "Nearly everything the global economy wants to invest in is copper-intensive, including the energy transition and AI."

Longer-term forecasts point to ongoing strain. BloombergNEF's Transition Metals Outlook 2025 projects that copper demand linked to the energy transition could triple by 2045. The market may move into deficit as early as 2026, with cumulative shortfalls potentially reaching 19 million tonnes by 2050 without substantial new investment in mining and recycling.

Kwasi Ampofo, head of metals and mining at BloombergNEF, said the predicted copper market imbalance reflects rising demand colliding with slow project delivery.

He added: "Copper, platinum and palladium have experienced very slow capacity addition at a time where demand is growing."

Analysts emphasize that processing capacity, rather than just mining output, represents a critical area, as existing hubs dominate global refining. Developing new facilities requires significant capital, long timelines, and specialized expertise.

The 2025 performance highlights copper's strategic role in supporting industrial and technological advancement. Ongoing monitoring of supply developments and demand trends will shape future market dynamics.