Doha, Qatar: Qatar National Bank (QNB) expects copper prices to maintain their upward trajectory in the coming period, supported by growing global demand for the metal, driven by the accelerating energy transition and the expansion of infrastructure related to artificial intelligence, while the supply side faces structural constraints that limit its ability to keep pace with demand growth.
In its weekly report, the bank noted that copper prices, despite rising to approximately $6.20 per pound and surpassing their highest levels in several years, remain below their historical real levels recorded during the 2008 commodity super-cycle, suggesting further room for gains.
The report explained that continued demand growth, coupled with slow increases in supply and the lengthy period required to develop new mining projects, could widen the supply gap and support copper prices over the long term.
It noted that the China-led urbanization boom during the previous cycle drove an unprecedented increase in industrial demand. Unlike gold and several precious metals, however, copper prices have broadly tracked US inflation over the past 15 years without outpacing it in real terms.
This suggests that current prices do not fully reflect the structural increase in demand for copper. The metal’s relatively affordable cost also means that the global economy still has meaningful capacity to absorb further price increases. From this perspective, the valuation argument remains intact and may be even more compelling today as the factors supporting demand continue to strengthen.
The report pointed out that the global energy transition is the strongest and most sustainable long-term driver of copper demand. Renewable energy technologies, such as wind, solar and hydropower, require between two and five times more copper per unit of generating capacity than traditional fossil fuel-based power generation technologies.
It also noted that modernizing electricity grids, expanding transmission networks, increasing large-scale battery storage and developing electric vehicle charging infrastructure all require substantial amounts of copper. Electric vehicles alone require up to four times more copper than conventional internal combustion engine vehicles, in addition to the extra demand generated by charging infrastructure.
The report stressed that these demand drivers are generally insensitive to short-term macroeconomic fluctuations, as national policies, decarbonization targets and corporate commitments related to the energy transition support multi-year investment cycles in renewable energy generation capacity and electricity grid infrastructure.
The bank said the electrification of the economy is a common element in almost all major decarbonization pathways, further enhancing the importance of copper as one of the key metals enabling this transition and an indispensable component in this regard.
Meanwhile, the report noted that the rapid expansion of artificial intelligence in recent years has created a significant new source of copper demand, as AI data centers, high-performance computing infrastructure and advanced semiconductor facilities consume increasing amounts of electricity.
It highlighted that higher power consumption is placing additional pressure on electricity grids, prompting utilities to expand capacity and invest in more resilient power transmission systems, projects that require intensive use of copper.
The report also pointed out that hyperscale data centers represent a growing source of copper demand, as the metal is used in many of their components, from transformers and wiring to cooling systems and backup power facilities.
It added that, as the adoption of artificial intelligence expands across various sectors, data centers have become one of the fastest-growing sources of incremental copper demand, with their contribution potentially rivaling that of electric vehicles over the long term.
On the supply side, the report explained that the copper market remains constrained by structural factors, noting limited growth in mine production in 2026 and the continued underperformance of several major producers, including Codelco, the world’s largest copper mining company, relative to their full production capacity.
It further noted that capital expenditure in the mining sector remains insufficient relative to asset depreciation, meaning the industry is not investing at a pace sufficient to keep up with demand growth. At the same time, major copper projects typically require 10 to 15 years to develop, from discovery to full production.
The report said that any significant additional supply approved at current price levels is therefore unlikely to reach the market before the early 2030s at the earliest.
In the meantime, smelters and refiners have relied on scrap and secondary sources to maintain production levels. However, this remains a temporary mechanism for bridging the gap rather than a structural solution.
The report concluded that the copper supply gap could widen in the coming years, with demand growth driven by two key factors - the global energy transition and the development of AI-related infrastructure - while the ability of supply to keep pace with this growth remains limited, potentially supporting copper prices in the coming period
