Copper Advances to 6.64 USD as U.S. Import Surge and AI Grid Demand Trigger Global Supply Squeeze

August 25, 2026 – COMEX High Grade Copper (HG1) futures extended their upward momentum this week to trade near 6.64 USD per pound, maintaining proximity to recent multi-year highs.

While retail market commentators continue to fixate on the Chinese real estate sector, institutional capital has aggressively rotated its focus toward a historic physical supply squeeze unfolding across Western exchanges.

Driven by rampant U.S. imports, looming tariff uncertainties, and surging demand for AI data center electrification, the global deliverable copper pool is shrinking rapidly, forcing immediate-delivery premiums to historic levels.

The COMEX-LME Arbitrage and Tariff Squeeze

The primary fundamental catalyst driving copper's aggressive pricing is a massive arbitrage distortion between the U.S. COMEX and the London Metal Exchange (LME).

Fearing the implementation of new White House tariffs on refined metals, U.S. industrial buyers imported over 200,000 metric tons of copper last month, marking a 12-year high.

This unprecedented U.S. stockpiling has aggressively drained LME warehouses, slicing global stockpiles by 14% in a matter of weeks and triggering severe backwardation. As a result, physical consumers are being forced to pay a massive premium to secure immediately deliverable metal rather than waiting for future contracts.

AI Infrastructure and Mine Supply Deficits

Beneath the immediate tariff-driven arbitrage, copper is being structurally underpinned by the sheer scale of the global energy transition and artificial intelligence infrastructure build-out.

Major cloud providers and utility companies are quietly locking in long-term physical copper supplies to build out high-voltage transmission lines, transformers, and AI server farm cooling systems.

Simultaneously, global mine output contracted by 1.6% in the first half of 2026 due to operational disruptions across Chile, Indonesia, and the Democratic Republic of Congo. This persistent structural deficit severely limits the ability of global miners to ramp up production in response to the current price surge.

Technical Breakout and Market Outlook

From a technical analysis perspective, HG1 copper futures have established formidable structural support above the 6.45 USD baseline, efficiently absorbing minor macroeconomic profit-taking.

Trading desks note that as long as the immediate-delivery physical squeeze persists, algorithm-driven momentum funds are heavily incentivized to buy every intraday dip.

Chartists emphasize that a decisive daily close above the 6.71 USD record high would likely trigger a massive short-covering rally, clearing a path toward the psychologically critical 7.00 USD per pound threshold heading into the fourth quarter.