Copper: how supply disruptions turned a “boring” metal into a strategic asset

Copper used to be just a cyclical industrial metal. In 2025, it’s looking more like a strategic choke point in the energy transition and electrification story.

A chain of supply hits

Several major disruptions have tightened the copper market:

• The shutdown of the massive Cobre Panamá mine due to political upheaval in Panama removed a significant chunk of annual global copper supply and highlighted the geopolitical risk embedded in key projects.

• A deadly mudslide at Indonesia’s Grasberg mine, one of the world’s largest copper operations, forced a halt in output and led the operator to declare force majeure, prompting big banks to cut their copper supply forecasts for 2025/26.

• Additional headwinds: lower than expected output and revised production plans from major miners in Chile and other regions, as they battle lower ore grades and operational problems.

  
  

Taken together, this pushes the market from an expected surplus toward a potential deficit, which is exactly the kind of setup that fuels bullish narratives.

Demand doesn’t care about your supply problems

On the demand side, the big drivers are structural:

• Grid upgrades and electrification

• EVs and charging infrastructure

• Data centers and AI which are extremely power hungry and copper intensive.

None of these themes are going away, If anything, they are accelerating, which means demand is relatively insensitive to short term price spikes.

Why investors care

The combination of:

• concentrated supply in a handful of politically sensitive countries,

• slower permitting and ESG constraints on new mines,

• secular demand from energy transition,

creates the classic setup for a multi year tight market.

Major investment banks and industry analysts have shifted from talking about “balanced” copper markets to highlighting the real risk of persistent deficits as disruptions stack up.

For traders and allocators, copper is no longer just a macro proxy it’s becoming a core strategic asset in the green energy and AI infrastructure trade.