Copper prices are on track for their biggest annual gain in more than a decade, driven by: supply disruptionWeak dollar, Improve expectations for China’s economic growth—and Huge spending on artificial intelligence.

Analysts say the red metal’s rally is likely to continue next year, especially amid supply concerns and tight supplies. rapid expansion Global data center footprint.

Three-month copper prices on the London Metal Exchange (LME) rose 1.5% to $12,405 a tonne on Tuesday, giving up recent gains after hitting a record high of $12,960 in the previous session.

The benchmark contract is up about 41% this year, on track for its best year since 2009, when it rose more than 140% as countries emerged from the global financial crisis.

In New York, copper prices have surged more than 40% since the start of 2025 and are on track for their biggest annual gain since 2009, when the contract rose 137.3%.

The demand for copper is consider broadly Indicators of economic health. Base metals are vital to the energy transition ecosystem and are integral to the manufacturing of electric vehicles, power grids and wind turbines.

In fact, electrification, grid expansion and data center expansion All require a lot of copper For use in cabling, power transmission and cooling infrastructure.

Ian Roper, commodities strategist at Astris Advisory Japan KK, pointed to a boom in global artificial intelligence demand as the latest driver of copper prices, and “very tight” markets could mean further gains for the red metal next year.

“The story of copper over the past few years has been green energy, right? Even though China’s real estate market has declined significantly, which has affected steel demand, iron ore prices and other factors, the impact on copper has not been huge,” Roper told CNBC’s Dan Murphy on December 23.

He added: “Copper has been a big beneficiary of renewable energy, electric vehicle construction and, of course, now data centers are the biggest growth point.”

JPMorgan analysts said in a report research notes A report released in late November stated that LME copper prices may have room to rise further next year, with prices expected to average $12,500 per ton in the second quarter.

The Wall Street bank said it expects copper prices to average $12,075 by 2026 and views rising data center demand as an “extremely hot” upside risk.

Gregory Shearer, head of base and precious metals strategy at J.P. Morgan, said in a report: “All in all, we believe that the unique dynamics of inventory disconnects and severe supply disruptions leading to a tightening of the copper market are bullish for copper and sufficient to push copper prices above $12,000/ton in the first half of 2026.”

However, not everyone is so optimistic about the outlook for copper prices.

Analysts at Goldman Sachs Research expect copper prices to fall from recent record highs, even as growing demand for the metal gradually pushes prices higher over the long term.

in a research notes Analysts at Goldman Sachs Research published an article on December 11 saying that LME copper prices are expected to remain between US$10,000 and US$11,000, as strong global demand growth in the grid and power infrastructure industries, “supported by investments in strategic industries such as artificial intelligence and defense,” will prevent copper prices from falling below US$10,000.

Analysts said they expect LME copper prices to average $10,710 in the first half of 2026. Looking further into the future, they expect LME copper prices to climb to $15,000 in 2035, noting that this is above industry analyst consensus.