Copper: AI-driven demand reshapes pricing – Societe Generale

Societe Generale’s Commodity Compass Analytics team, led by Michael Haigh and Jeremy Sellem, argues that Copper has been increasingly driven by AI-related demand, arbitrage flows and US trade policy since February 2025. They show that limited mine supply, strong competition for concentrates and accelerating investment in AI, data centres, power grids and EVs have tightened Copper’s physical market and complicated traditional analysis of Copper returns.

AI, tariffs and arbitrage reshape Copper

"Since February 2025, copper has been driven not only by traditional supply and demand fundamentals but also by arbitrage flows and US trade policy. Limited mine supply, strong competition for concentrates, and growing demand from AI, data centres, power grids, and EVs have supported prices. At the same time, tariff-related arbitrage has redirected large volumes of copper inventories towards the United States, tightening physical availability elsewhere."

"We argue that these new forces have made the market increasingly difficult to analyse using traditional frameworks alone."

"Copper's performance since February 2025 reflects the interaction between traditional supply and demand fundamentals and a new set of market forces centred on geographic arbitrage and trade policy. On the supply side, a persistent lack of new mine capacity and intense competition for copper concentrates have continued to constrain raw material availability. On the demand side, accelerating investment in AI, data centres, power grid expansion, and rising EV sales has strengthened expectations for long-term copper consumption."

"In this report, we seek to decompose copper returns since February 2025, quantify the contribution of these various drivers to price performance, and provide a clearer framework for assessing the outlook for copper in a rapidly evolving market environment."