The reason why copper is at the center of conversation right now is the fact that copper is the enabler to electricity. It is the enabler to power. And if we think of what AI is all about, it is about massive data centers that require a significant amount of power being delivered. So power being delivered from utility, that comes through a cable wire that is made out of copper.

It is also copper cabling that goes into the network that runs within the AI data centers. Other aspect that people don't necessarily think of when they talk about AI data centers is the cooling of the data centers. So one of the big uses of copper in the world is actually air conditioning or HVAC systems. And so when you think about cooling of an AI data center, that's that sort of technology that requires copper that we will need.

So if we think about grid infrastructure, there's a couple of ways we need to think about it. First of all, and this is on a global scale, not just in the United States, but the current grid infrastructure does not have the capacity to carry the electricity that comes through it in an efficient way. And it definitely does not have the capacity to carry the increase in demand that we're expecting.

So, we need copper for a number of reasons. One is to upgrade the current system, because the system is very old. And then secondly, as we see new avenues of electricity demand, new regions, new destinations, we need to have new copper, cables being laid to these new places, and, those cables are typically made out of copper.

Copper in the Spotlight

Copper traditionally, is driven by traditional economic drivers. However, copper is in the spotlight at the moment, I believe, for two reasons. One is the lack of investment over the last decade in supply. That was exacerbated by the issues we saw in 2025, where about 5% to 6% of global supply came offline for a range of different reasons.

The second reason why it is in the spotlight now is clearly there's a race in data centers, a clearly a race in AI. And to win that race, you need to have power. And again, the only way you can efficiently deliver power is through copper cables, whether it is through alternative energy, through nuclear, through thermal coal or coal plant, copper is the only way you can efficiently, cost effectively deliver the power from the utility to the end consumer.

Copper Risks to Monitor

So there's a couple of risk aspects that I believe is important to consider when you think about copper.

One is obviously on the demand side, Global economic demand trends will impact copper. is still the biggest consumer of copper, The scale back of AI rollout, data center rollouts, that is a risk that's out there. On the supply side, I believe in the short term, it is labor specifically, north of 10% of global copper supply are going to be going through labor negotiations in 2026.

And then the last aspect that is a risk that people don't talk about is probably substitution. Now, yes, you can substitute aluminum into copper for a similar distribution of electricity, but you need about four times the bigger cable in aluminum than you need in copper. So it's not always cost effective. So there's a playoff between the cost of aluminum and copper to really make that argument at the moment.

In summary, copper finds itself at the crossroad of accelerating demand and constraint supply.