Copper hits record $6.90 a pound amid supply crunch and tariff fears

U.S. copper futures reached an all-time high of approximately $6.90 per pound on Thursday, August 6, 2026, before pulling back by the session's close. The record price reflects a complex mix of supply constraints, tariff uncertainties, and surging demand from electrification and AI infrastructure, rather than a straightforward signal of broad economic growth.

The rally directly affects industries reliant on copper, including construction, electronics, transportation, and power grid developers. According to William Osnato, Barchart director of commodity data research and analysis, the price surge is driven by data center and power grid demand to support the rapid AI industry expansion, which he described as more acute and not the traditional broad economic growth that supports copper.

The record price matters because copper has historically served as a barometer of global economic health, often called "Dr. Copper." However, Michael Widmer, Bank of America's head of metals research, told CNBC that the move was not really driven by copper demand but by copper supply, citing weak mine supply growth and disruptions in Chile, the world's largest single copper producer, where heavy snow, rainfall, and high winds have hampered operations.

Supply tightness has been exacerbated by potential U.S. Section 232 tariffs and China's crackdown on scrap copper availability in 2026. In June 2025, President Donald Trump signed a proclamation imposing 50% tariffs on imports of semi-finished copper products and copper-intensive derivative products. Additionally, the Democratic Republic of Congo officially banned exports of copper and cobalt concentrates on Thursday to encourage domestic processing, further straining global supplies.

Demand remains firm, tied to electrification rather than an economic boom. China's grid investment rose 13% year over year in the first half of 2026, and the country recently announced a plan to invest approximately $574 billion in power grid upgrades. Osnato noted that supply disruptions have pushed consumers to pull metal out of London Metal Exchange warehouses, driving up refining costs.

Osnato characterized the situation as "definitely a new situation for Dr. Copper," indicating that the metal's price signals now reflect structural shifts in supply and specialized demand rather than cyclical economic trends.