Comment: Copper hits record highs

“Copper prices set new record highs as structural demand drivers and supply concerns converge. The closure of the Strait of Hormuz is triggering a sulphuric acid crunch, squeezing a crucial component in copper mining.

“These mounting supply fears are adding to long-term tailwinds from copper’s use in AI, cleantech and defence. Tech giants continue to pour capital into data centre buildouts, the clean energy transition is gaining momentum supported by the spike in oil prices, and defence programmes are expanding amid ballooning security budgets and geopolitical uncertainty. The metal’s indispensable role across these critical industries supports the bullish outlook and the case for further gains.

“Yet the fundamentals are more mixed than the record price suggests, as the market could be in for another surplus this year. The Middle East conflict is sparking stagflation risks that could stifle global growth and weigh on critical minerals consumption. The rally may have legs, but the non-ferrous metal remains vulnerable to a correction against a volatile macroeconomic backdrop.”