Copper prices have rallied 15.8% year-to-date and over 30% during the past 12 months, significantly outperforming gold. According to industry executives and market investors, surging demand from artificial intelligence infrastructure, power-grid investments, and defense spending is transforming the industrial metal into a strategic national asset.
Why are industrial metals turning into strategic assets for governments?
Governments and industries are increasingly prioritizing copper access for national security, economic growth, and technology infrastructure. Speaking during the annual LME Week gathering of the global metals industry in London, Ivanhoe Electric CEO Taylor Melvin told CNBC that critical metals are evolving into strategic assets in every sense of the word. His Arizona-based mining and exploration company focuses on copper, gold, silver, nickel, and cobalt.
Melvin noted that it is a strong period for copper mining globally, particularly within the United States. This strategic shift positions copper as a requirement for national security, economic growth and technology infrastructure.
Can copper demand withstand a slowdown in artificial intelligence spending?
Tech stock valuations have recently experienced volatility amid investor questions regarding the sustainability of AI spending and data center build-outs. However, Melvin told CNBC that copper demand from the technology sector exhibits strong inelasticity.
It’s a new pocket of demand, and it really is almost an inelastic demand for copper,
Melvin said, adding that large-scale technology companies do not make hyperscale data center investment decisions based on copper costs. He also pointed out that national defense budgets share this same demand inelasticity, ensuring steady incremental consumption despite fluctuations in equity valuations.
Did you know? Copper has outperformed gold over the past year. While copper futures have climbed more than 30% over the last 12 months, spot gold is down 4.89% and gold futures have slipped 4.52% over the same timeframe.
How are U.S. tariffs and global inventories affecting the market?
Market uncertainty regarding potential U.S. trade policies has further supported the copper rally. In 2025, the U.S. Commerce Department recommended a 15% tariff on refined copper, set to begin on January 1, 2027, though no final decision on the levy has been publicly announced yet.
Anticipation surrounding this policy has altered global storage patterns. Iain Pyle, senior investment director at Aberdeen Investments and co-manager of the abrdn Future Minerals Fund, told CNBC that a large share of the world’s copper is currently stored in the U.S. due to tariff potential, leaving questions about whether those stocks remain available to the wider market.
At the same time, Chinese inventories are exceptionally low while local premiums rise. In an October 15 note, Pyle described copper as the clearest example of a market where supply cannot keep up with demand, warning that higher incentives will be needed in the form of sustained higher copper prices.
Answers to common questions about the copper market surge
How much have copper prices risen this year?
Copper has rallied 15.8% year-to-date and is up more than 30% over the past 12 months, according to market data reported by CNBC.
What is the status of the proposed U.S. copper tariff?
In 2025, the U.S. Commerce Department recommended a 15% tariff on refined copper beginning January 1, 2027. However, CNBC reported that no final decision on the proposed levy has been publicly announced.
How do gold and copper performance compare?
While copper prices have gained over 30% in the past year, gold futures have slipped 4.52% and spot gold is 4.89% lower over the same 12-month period, according to CNBC figures.