This beginning of the year has shaken the foundations of the global economy. Between the capture of Nicolás Maduro by the United States and unprecedented geopolitical volatility, copper—one of the key minerals for the energy future—has climbed to an all-time high, exceeding $13,000 per ton.
This escalation is not a passing fluctuation. As Bloomberg detailswe are facing a “perfect storm” where a severe adjustment in supply combined with an unbridled risk appetite. The market has entered a phase of backwardation (where the immediate price is higher than the future), a technical signal that, according to analysts, points to a real and desperate physical shortage.
Data centers: the black hole of metal. While construction and energy have always been the pillars of copper consumption, artificial intelligence has changed the scale of the problem. According to an analysis by businessman Frank Holmesa conventional data center consumes between 5,000 and 15,000 tons of metal. However, a “hyperscale” center—necessary to train AI models—can require up to 50,000 tons per facility.
In addition, it highlights an uncomfortable reality for 2030, a year in which data centers could devour more than half a million tons of copper annually. Here lies the big problem, since the demand for technology is absolutely inelastic. As Holmes explainsthe silicon giants don’t care if copper costs $10,000 or $20,000 because the metal represents less than 0.5% of the total cost of an AI project. They will pay whatever it takes, emptying warehouses and leaving the rest of the industries (construction, appliances, motor) without supply.
An offer that falls apart. While demand flies, production is in crisis. According to a Financial Times reportthe price has risen almost a third since October driven by disruptions at key mines such as the Grasberg complex in Indonesia. Added to this is the Mantoverde strike in Chile, which has been the final trigger. Although it only contributes 0.5% of world production, its gradual closure has reminded the market that there are no longer safety “mattresses.”
The situation is structural. As Reuters has pointed outhe breakeven to develop new mines already exceeds 13,000 dollars per ton. Without record prices, there is no incentive to dig. Citi analysts estimate a deficit of 308,000 tons for this year, while ING Group projects that by 2026 the gap will reach 600,000 tons.
The geopolitics of the “bottleneck”. The world board shows a dangerous fracture. China has played a master card because it only has 4% of the world’s reserves, but controls 49% of global refining. Beijing is buying concentrates from Chile and scrap from the US to process them and return them to the market as finished products. Whoever controls refining will control the technological transition.
On the other side, Donald Trump’s administration has introduced chaos with tariffs. According to Bloombergfear of imminent liens has led to a “disjointed inventory.” US warehouses are at record levels with 450,000 tons, while stocks on the London and Shanghai stock exchanges have plummeted by more than 55%. copper is in the wrong place for the rest of the world.
The “Venezuela Effect”. The recent capture of Nicolás Maduro by US forces added a layer of geopolitical uncertainty. Although Trump’s attention has focused on oilthe CSIS (Center for Strategic and International Studies) wonders if Venezuela it’s a goal of critical minerals.
The country has potential reserves of gold, coltan and bauxite. However, as the expert Luisa Palacios explainsthe Venezuelan mining sector is devastated by illegality and lack of investment. CSIS warns thatDespite current US control, the “legal overload” of past expropriations and the state of the infrastructure will prevent Western capital from rebuilding the industry immediately. However, for the copper market, the seizure of Venezuela is the definitive message: Washington has moved on to direct action and is willing to ensure by force the supply of strategic resources.
A decades-old problem. The industry faces to an insurmountable physical reality. The average time to start up a new copper mine is 17 to 19 years, so there is no quick fix that can respond to the exponential growth of AI in the next two years.
Given this, companies are looking for alternatives. Glencore and Schneider Electric are driving the “circularity of copper” through recycling. For its part, the International Energy Agency suggests using aluminum for less critical applications, although its efficiency is lower. Other attempts are more exotic, such as data centers under the sea that tests China or the facilities in underground caves to save cooling, although the need for copper cables remains the same.
The return to matter The paradox of our era is total. In the century of quantum computing, the fate of the global economy depends on the ability of miners in Chile or Indonesia to extract metal from increasingly poorer rocks. The “cloud”, however ethereal it may seem, is tethered to the earth by a copper wire.
As the Benchmark analyst points outAlbert Mackenzie, it is possible that speculation has inflated prices, but the underlying trend is unquestionable. Without copper, the green transition stops and artificial intelligence is left without a “body”. The digital future, ultimately, remains analog and reddish.
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