ETO Markets Buzz | Copper Nears Record Highs as AI Infrastructure Drives Commodity Repricing

Global Market Overview | May 2026

According to ETO Markets analysis, global commodity markets are entering a renewed phase of structural strength as AI infrastructure investment, energy transition demand, geopolitical uncertainty, and tightening supply conditions converge. Copper has moved close to record highs, while broader industrial metals continue to attract market attention as investors reassess long-term resource demand.

Chinas latest trade data reinforced this momentum. Exports rose 14%, while imports surged 25%, partly driven by efforts to move goods ahead of potential disruptions through the Strait of Hormuz. The data highlight the continued importance of shipping security, supply chain resilience, and resource access in global market pricing.

AI Infrastructure Drives Copper Demand

Copper remains one of the clearest beneficiaries of AI infrastructure expansion. Prices climbed above USD 6.20 per pound as markets priced stronger demand from data centres, power grid upgrades, electrification, renewable energy investment, and high-capacity transmission systems.

AI infrastructure requires significant copper inputs across electrical wiring, cooling systems, semiconductors, and grid connectivity. As governments and companies accelerate spending on data centres and energy systems, copper is increasingly being priced as a core infrastructure commodity rather than a traditional cyclical metal.

Supply Constraints Tighten the Market

Supply-side risks are also reinforcing the bullish structure. China has restricted sulphuric acid exports, removing roughly 3 million tonnes from the global seaborne market through at least December. Sulphuric acid is a key input in copper refining and processing, making this restriction important for downstream supply.

This adds to existing constraints, including lower ore grades, water shortages, rising production costs, and operational disruptions in major mining regions. Chile, the worlds largest copper producer, reported a roughly 6% year-on-year decline in production during the first quarter of 2026.

Inventories Rise but Scarcity Risk Remains

A divergence has emerged between rising visible inventories and elevated prices. LME copper inventories have increased in recent months, but ETO Markets views this more as strategic stockpiling, tariff-related positioning, and supply chain reallocation than genuine oversupply.

The fact that copper prices remain historically high despite higher inventories suggests markets are still focused on future scarcity. This keeps the long-term pricing bias supported, even if short-term volatility remains elevated.

US and Australia Add Mixed Signals

US macro data remain mixed. Non-Farm Payrolls increased by 115,000, above expectations, showing labour market resilience. However, consumer sentiment fell to a record low of 48.2, highlighting persistent pressure on household confidence.

In Australia, trimmed mean CPI held at 3.3% year on year, while the Reserve Bank of Australia raised rates by 25 basis points to 4.35%. Australias commodity price index also rose 15.7% to its highest level since December 2022, reinforcing inflation pressure from global resource demand.

Outlook

Looking ahead, ETO Markets expects AI infrastructure investment, energy transition spending, geopolitical developments, and supply chain disruptions to remain the dominant drivers of commodity markets. Upcoming inflation, trade, and industrial production data from the United States, Europe, and China will help shape expectations for growth and pricing pressure.

In this environment, ETO Markets continues to emphasise that copper remains a key barometer for the industrial and infrastructure cycle. Near-term volatility may stay elevated, but structural demand trends continue to support the medium- to long-term outlook for industrial and precious metals.

Disclaimer

The information contained herein is for general reference only and does not constitute investment advice, a solicitation, or an offer to buy or sell any financial products.

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