London Metal Exchange copper surged past $10,000 per tonne for the first time in 18 months, driven by robust demand from the electric vehicle supply chain and power grid infrastructure build-out globally. Each EV requires approximately 83 kg of copper compared to just 22 kg for a conventional internal combustion engine vehicle, making the metal a critical beneficiary of the energy transition.
Supply-side constraints are exacerbating the demand-driven price move. Major copper mines in Chile and Peru have been operating below capacity due to a combination of water shortages, community protests and declining ore grades. The global copper supply deficit is estimated at 800,000 tonnes for 2026, with the deficit expected to widen further in 2027-2028 as new mine development struggles to keep pace with accelerating demand growth.
Indian copper consumers, particularly in the wire and cable, transformer and motor manufacturing industries, face higher input costs at elevated LME prices. However, Indian copper producers like Hindalco and Vedanta benefit from improved realisations. The government's National Copper Policy, which targets tripling domestic copper production by 2030, has gained urgency as India seeks to reduce import dependence on a critical industrial metal at the heart of multiple strategic sectors.
