Copper hit London Metal Exchange (LME) record highs above $14,500 per tonne in January 2026 and held near that level into August. S&P Global points to a 10-million-tonne 2040 supply gap, IEA sees a similar trend, and 18-year mine lead times plus 2025's Grasberg accident and US tariffs are squeezing near-term supply.
How High Did Copper Prices Climb, and When?
The London Metal Exchange (LME) copper price hit an intraday record of $14,527.50 per tonne on January 29, 2026CITE:E1. Three-month copper remained near that record, trading around $14,258 per tonne on August 7, 2026CITE:E1. The gap between the January peak and the August level is small, indicating the price has held near record territory for more than six months rather than spiking and retreatingCITE:E1.
Why Could the 2040 Copper Supply Gap Reach 10 Million Tonnes?
S&P Global projects that global copper demand will reach about 42 million tonnes by 2040, roughly 50% above current levels, leaving a supply shortfall of about 10 million tonnes, or roughly 25% below projected demandCITE:E2. S&P Global attributes much of the increase to Artificial Intelligence (AI) data centers and defense spending, each of which it expects to roughly triple, together adding about 4 million tonnes of new demandCITE:E2. The International Energy Agency (IEA) reaches a directionally similar conclusion with different figures: it forecasts refined copper demand rising from about 27 million tonnes in 2024 to about 34 million tonnes in 2040, an increase of roughly 30% linked to the energy transition, alongside a projected primary supply shortfall of about 30% by 2035CITE:E4. The two institutions use different demand and gap figures, but both describe a widening shortfall building over the next decade and beyondCITE:E2CITE:E4.
Why Does It Take Over 17 Years to Bring a New Copper Mine Into Production?
S&P Global finds that new copper mines take an average of about 17 years from discovery to production, a lag that keeps supply from responding quickly to price signalsCITE:E3. For mines that began production between 2020 and 2023, the average lead time stretched to about 17.9 years, more than 40% longer than mines developed roughly 15 years earlierCITE:E3. That lengthening trend means mine development timelines are moving in the opposite direction from the faster-growing demand forecasts described by S&P Global and the IEACITE:E3CITE:E2.
How Are Tariffs and the Grasberg Accident Squeezing Copper Supply Right Now?
The United States imposed a 50% tariff under Section 232 on semi-finished copper and copper-intensive derivative products such as rod, wire, tube, and sheet, effective August 1, 2025, while exempting ore, concentrates, refined cathode, and scrapCITE:E5. Separately, Freeport-McMoRan declared force majeure after roughly 800,000 tonnes of wet material rushed into its Grasberg mine in Indonesia on September 8, 2025CITE:E6. Freeport-McMoRan now estimates that 2026 production at its PT Freeport Indonesia (PTFI) subsidiary will run about 35% below its pre-accident estimate, with normal operations targeted for 2027CITE:E6. The tariff applies to processed copper products rather than the raw ore and cathode that feed global refining, while the Grasberg accident cuts directly into mined output from one of the world's largest copper operationsCITE:E5CITE:E6.
What Do the Key Copper Numbers Look Like Side by Side?
The table below consolidates the price, demand, and supply figures cited by S&P Global, the IEA, and Freeport-McMoRan for direct comparison.
| Metric | Value | Source |
|---|
| LME copper record intraday high | $14,527.50/tonne (Jan 29, 2026) | CITE:E1 |
| Three-month copper price (Aug 7, 2026) | ~$14,258/tonne | CITE:E1 |
| S&P Global 2040 global copper demand forecast | ~42 million tonnes (~50% above current levels) | CITE:E2 |
| S&P Global 2040 supply gap forecast | ~10 million tonnes (~25% below demand) | CITE:E2 |
| AI + defense demand growth (S&P Global) | Each ~3x; ~4 million tonnes combined new demand | CITE:E2 |
| IEA refined copper demand, 2024 | ~27 million tonnes | CITE:E4 |
| IEA refined copper demand, 2040 | ~34 million tonnes (~30% increase) | CITE:E4 |
| IEA primary supply shortfall forecast by 2035 | ~30% | CITE:E4 |
| Average mine discovery-to-production time | ~17 years overall; ~17.9 years for 2020–2023 mines (~40%+ longer than 15 years ago) | CITE:E3 |
| US Section 232 tariff on semi-finished copper | 50%, effective Aug 1, 2025 | CITE:E5 |
| Grasberg mine incident material inrush | ~800,000 tonnes (Sept 8, 2025) | CITE:E6 |
| Freeport-McMoRan 2026 PTFI production estimate | ~35% below pre-accident estimate; normal operations targeted 2027 | CITE:E6 |
What this means: The evidence points to a structural mismatch between demand and supply timing. S&P Global and the IEA both describe rising copper demand over the next 10 to 15 years, while S&P Global's own data shows new mines now need close to 18 years to reach productionCITE:E2CITE:E4CITE:E3. That mismatch is compounded by an immediate supply hit — Freeport-McMoRan's roughly 35% production reduction at PTFI following the Grasberg accidentCITE:E6 — while US tariff policy under Section 232 targets processed copper products rather than the raw ore and cathode that feed global refining capacityCITE:E5. The record LME prices recorded in January and still visible in August 2026 sit atop both this long-run structural gap and the short-run supply shocks described aboveCITE:E1.