Copper price chart

The May and June US copper contracts both touched $5 per pound today, a record high for the the metal.

The story is well-known and something I've been writing about for years: There has been minimal investment in new supply and the green transition is incredibly copper-intensive.

The latest leg is also benefiting from current and future demand for data centers and electricity in general. In addition, China's economy is improving and it's responsible for about 50% of global copper demand.

The picture remains impressive. Goldman Sachs last month said copper is in "the foothills of what will be its Everest" and with the break to $5, clearing the 2022 highs, the argument is compelling. Notably though, today's price action has been volatile. After starting at $4.80, it surged to $5.04 only to retrace to $4.91. A close above $5 would add some confidence for the bulls.

Ultimately though, it will come down to supply and demand. For the bulls, the most powerful indicator is the investment pipeline. It takes 10-15 years to develop a greenfield copper mine so there is very little that can be done if prices skyrocket, aside from additional recycling.

That supply response pales in comparison to what could be insatiable demand for green energy, power transmission, data centers, EVs and even weapons.

Have a look at these supply/demand balances from Bank of America: