October 7, 2026
Copper reached a record on September 10, with the three-month contract trading at US$14,875 per tonne on the London Metal Exchange. Silver is trading at around US$61 per troy ounce, roughly half its January closing high of nearly US$117. Both metals have been on the US critical minerals list since November 2025, and both illustrate how closely technology, energy and geopolitics have become intertwined.
When considering why the two metals are so important, their technical advantages and low prices quickly stand out. Copper conducts electricity well while remaining relatively inexpensive. It is used in power grids, transformers, motors, charging stations and the data centers being built for artificial intelligence. The energy transition is also driving demand, as an electric vehicle contains significantly more copper than a vehicle with an internal combustion engine.
The same applies to silver. After gold, silver is the best electrical conductor of all metals, making it difficult to replace in solar cells, electronics, and vehicles. According to the World Silver Survey, industrial demand accounted for around 657 million ounces in 2025, or about 58 percent of total demand. The Silver Institute expects photovoltaic demand to reach around 151 million ounces in 2026. However, manufacturers are increasingly reducing the amount of silver they use: Industrial demand fell by three percent in 2025. Data centers and solid-state batteries are also considered new growth areas, but reliable volume estimates are not yet available.
Scarcity with limitations
For silver, the Silver Institute reported a fifth consecutive annual deficit in 2025 (40.3 million ounces) and expects a sixth in 2026, at 46.3 million ounces. However, compared with demand of just over 1.1 billion ounces, the deficit is small. In addition, about 70 percent of silver is produced as a byproduct of mining other metals. Supply therefore responds very little to price changes.
For copper, the picture is even more nuanced. According to the International Copper Study Group, the refined copper market recorded a slight surplus of 32,000 tonnes from January through July. Factoring in changes in Chinese bonded warehouse inventories results in a deficit of 5,000 tonnes.
The bottleneck lies with the mines: According to Benchmark Minerals, the mudslide at Indonesia’s Grasberg mine in September 2025 will remove around 590,000 metric tons of production from the market through the end of 2026. As a result, global mine production fell by 1.1 percent in the first half of the year, while smelter treatment charges for 2026 were set at zero dollars per metric ton, a sign of tight concentrate supply.
Who has access
According to the USGS, Chile produced 5.3 million tonnes of copper in 2025, accounting for nearly a quarter of global production of around 23 million tonnes. The Democratic Republic of the Congo and Peru ranked second and third, respectively. China, by contrast, produced only about one-third of Chile’s volume but accounts for around half of global copper smelting. Beijing’s power therefore lies in processing, not mining. The US meets around 57 percent of its refined copper consumption through imports, 68 percent of which come from Chile.
Mexico is the world’s largest silver producer, with an annual output of 173 million ounces. It accounts for nearly one-fifth of global mine production. The inclusion of silver on the US list of critical metals and minerals was justified in part by the risk of a disruption to Mexican silver production. Europe produces comparatively little silver and copper and is primarily a buyer of both metals.
How the three blocs are consolidating their positions
The US is pursuing a combination of tariffs, stockpiling and alliances in its trade and raw materials policy. Since August 2025, it has imposed a 50 percent tariff on semi-finished copper products. Tariffs of 15 percent starting in 2027 and 30 percent starting in 2028 have been proposed for refined copper, but have not yet been approved. The prospect of higher tariffs immediately led to a massive buildup of inventories in the US.
COMEX inventories reached a record level of around 675,000 metric tons of copper in August. In addition, there is the $12 billion Project Vault critical minerals stockpile announced in February and the plan for a trading bloc with minimum prices for partner countries.
Over the past several decades, China has secured the key position in the middle of the supply chain and is continuing to expand this dominance. State-backed smelters even accept concentrate without charging a fee to nip any thought of refining outside China in the bud, silver exports require a license, and the central bank is buying gold as if there were no tomorrow.
The European Union is relying on the Critical Raw Materials Act, under which no third country should supply more than 65 percent of any raw material, the RESourceEU action plan, and export restrictions on magnet scrap. A European raw materials company is also planned. How much of this can be achieved remains uncertain, as new mines and smelters take years to develop.
Prices are highly volatile: copper is at a record high, while the price of silver has nearly halved since January. At first glance, that may not sound like a major risk to many investors. But the real competition is not primarily about mine production; it is about processing, storage and international supply contracts. Whoever controls them sets the terms for AI and the energy transition.
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