Why the Copper cost increased so higher recent years ?

Copper costs surged in recent years due to a powerful combination of limited supply (mining disruptions, underinvestment) and exploding demand, driven by the global energy transition (EVs, renewables), massive AI infrastructure build-outs, and economic recovery signals from China, creating a significant supply-demand imbalance that intensified market tightness. Investor interest, strategic stockpiling, and geopolitical factors further amplified price increases, making copper a strategic metal for the future economy.
Key Drivers for Increased Copper Costs:
Supply Constraints & Mining Challenges:
Operational Disruptions: Major producers in Chile, Peru, and Indonesia faced issues like labor disputes, weather events, and accidents (e.g., Grasberg mine mudslide), reducing output.
Underinvestment: Years of slow development meant few new mines were ready to meet growing demand, leading to a long-term supply lag.
Lower Ore Grades: Mines are processing lower-quality ore, increasing costs and production volume needed.
Surging Demand:
Energy Transition: Copper is essential for wind turbines, solar panels, and electric vehicles (EVs), all booming sectors.
AI & Data Centers: The explosion of AI requires massive amounts of copper for data center infrastructure, adding significant new demand.
Economic Growth: Signs of strong growth, especially from China (a major consumer), boosted market sentiment.
Market Dynamics & Investment:
Strategic Asset: Investors increasingly view copper as a crucial metal for future green technologies, increasing speculative interest.
Hoarding: Companies stockpiled copper due to supply fears, further tightening the market.
Weakening Dollar: A weaker US dollar makes dollar-denominated commodities like copper cheaper for foreign buyers, boosting demand.
Geopolitical Factors:
Tariffs & Trade: Uncertainty over potential tariffs (like those considered in the U.S.) added risk premium and market volatility.
In essence, a tightening market due to slower supply struggling to keep pace with rapidly accelerating demand, especially for green tech and AI, is the core reason for copper’s price surge.