Copper Prices Near Record Levels as Sulfur Shortage Bites

Copper prices have surged above $14,000 per ton, approaching historic highs as a global sulfur shortage disrupts supply chains and intensifies pressure on an already tight market. The rally reflects a combination of geopolitical tensions, production setbacks, and rapidly growing demand from artificial intelligence and defense industries.

A major trigger has been the blockade of the Strait of Hormuz, which disrupted exports of sulfur and sulfuric acid, both critical materials used in copper refining processes such as heap leaching and SX-EW.

Gulf countries account for roughly a quarter of global sulfur supply and a significant share of sulfuric acid trade, making the region essential to refined copper production. The crisis deepened after China imposed restrictions on sulfuric acid exports a few weeks ago to protect domestic fertilizer production.

As a result, sulfur prices climbed above $1,200 per ton, while transport alternatives remain limited due to the hazardous nature of sulfuric acid. Higher oil prices have also increased mining costs, adding further pressure to future copper supply expansion.

The impact has been especially severe in major mining regions. Chile, the world’s largest copper producer and a key importer of sulfuric acid, recorded a 6% drop in copper output during the first quarter of 2026 after acid prices doubled within weeks. In Africa, producers in the Democratic Republic of the Congo and in Zambia have faced sulfur costs exceeding $1,000 per ton.

The International Copper Study Group has already lowered its 2026 supply growth forecast due to disruptions across Chile, Indonesia, and the DRC. At the same time, long-term demand expectations continue to strengthen.

AI infrastructure has emerged as a major structural driver of copper consumption. Modern hyperscale data centers require large volumes of copper for transformers, cooling systems, power distribution, and grid upgrades. Defense spending is also adding to demand, particularly as NATO members expand military budgets and accelerate investments in advanced electronics and energy systems.

Despite high reported inventories, the physical market remains tight. Much of the copper stockpiled in the United States is tied to strategic reserve programs and is not freely available to industry. This has created what many analysts describe as an “inventory illusion,” where visible supply appears comfortable even as exchange liquidity stays constrained.

Although some institutions warn that copper prices may be running ahead of short-term fundamentals, the broader outlook remains supportive. Years of underinvestment in mining, combined with rising demand from AI, electrification, and infrastructure, continue to point toward a long-term structural deficit in the global copper market.

These underlying market conditions favor the long-term prospects of exploration companies like Numa Numa Resources Inc. as a lot more copper is going to be needed in the coming decades and yet existing mines are experiencing declining ore grades or are approaching retirement.

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