Copper prices have hit a six-week high, as tight supply conditions in China underscore the volatility of a metal that is becoming an increasingly in-demand component for the next generation of electricity.
Chinese copper inventories monitored by the Shanghai Futures Exchange fell 20 per cent in one week to 79,909 tonnes, their lowest level since August 2025, according to investment research firm The Oregon Group. US Comex futures gained more than 3 per cent to $6.56 a pound due to the conditions in China, which accounts for more than 50 per cent of global copper demand.
The latest inventory trends in China show what has been a wild year for copper prices, which surged to a record high of $13,552.04 a tonne in May.
This surge could partly be attributed to powering and cooling the data centres that drive artificial intelligence.
Copper is increasingly regarded as an essential component for AI building, electrification, electric vehicles and grid expansion, so demand for it is rising. The US Geological Survey added it to its critical minerals list last year.
"Copper is being pulled in multiple directions at once," said Raul Munoz, industry leader for mining and natural resources at Marsh.
However, the time from discovery to production for mining projects averages 16 years, according to an S&P Global analysis.
"That mismatch between how quickly demand can change and how slowly supply responds is what continues to drive volatility," Mr Munoz said.
Heavy metal
The story behind this volatility is not unique to copper. Indeed, its price surge was similar to that of other critical minerals last year.
Prices for aluminium, the shipping channels for which in the Middle East have been disrupted because of the Iran war, have risen by one third between January 2025 and April 2026. So have prices for tin.
Lithium prices have more than doubled, while cobalt prices surged 130 per cent, mostly due to export restrictions from the Democratic Republic of the Congo. Tungsten has surged sixfold.
"We’re seeing increasing volatility across many critical minerals as markets react not only to supply and demand fundamentals but also to geopolitics, export controls and resource security," Mr Munoz said.
These minerals are increasingly being viewed not just for electrification, but also national security. The Iran war is depleting supplies of tungsten, a mineral used for missiles and other military purposes.
Push and pull
US President Donald Trump on Monday signed an executive order making it more difficult for contractors to secure waivers to buy critical minerals and other material from China. The order was the latest effort by the White House to reduce reliance on Chinese imports.
"It's kind of a price floor," said Eric Robinson, special counsel at Baker Botts law firm.
Mr Robinson called this dynamic a "push and pull", where the Trump administration is pushing political emphasis on securing these supplies while pulling in others to provide market consistency.
The US Defence Department is investing heavily in domestic companies such as MP Materials and USA Rare Earth, while the Trump administration has been pushing to establish price floors through diplomatic channels. Accelerating this push were two waves of export controls by China on rare-earth elements, which have since been temporarily suspended until later this year.
"The world has woken up to a brittle supply chain," Mr Robinson said. "The United States recognised, from a military perspective ... that critical subcomponents of everything from auto manufacturing to guided missiles was now more difficult to access than ever, that an extraordinarily efficient market led to a brittle market, and the 18 months of focus on critical minerals, materials and metals is a result of that."
