The price of copper rose to about $6.6 per pound on Tuesday, marking the third consecutive session of increases. This upward trend is observed amid the growth of risk assets, particularly in technology and artificial intelligence stocks.
Growing Demand for Copper
Demand for copper is increasing due to the rapid expansion of data centers and the energy infrastructure needed for the development of artificial intelligence. However, the short-term demand outlook remains constrained due to signs of weakening industrial activity in China, the largest consumer of this metal.
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Supply Constraints and Strikes
On the supply side, copper production in Chile fell to its lowest level since February 2011 in August. Meanwhile, workers at the Centinela mine owned by Antofagasta voted in favor of a strike as wage negotiations failed to reach an agreement. These developments could exacerbate the copper shortage in the market.
Impact of U.S. Tariff Threats
On the other hand, the Trump administration has yet to make a decision regarding potential tariffs on refined copper. Previous U.S. threats regarding tariffs on refined metals have led traders to direct shipments towards U.S. warehouses, contributing to the recent rise in copper prices.
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