RIA Ideas - Doctor Copper
Trade Idea · Copper
The Good Doctor
Dr. Copper is diagnosing the next big trade. Are your clients positioned?
The AI + Inflation Case
110,000 tonnes of new demand
That is what AI data centers add to 2026 copper demand versus a pre-AI baseline, per JPMorgan. Total data center copper demand in 2026 runs closer to 475,000 tonnes, and one large AI facility can require up to 50,000 tonnes on its own.
Skillings, citing JPMorgan (2026) · CarbonCredits, citing J.P. Morgan (2026)
150,000 to 330,000 tonnes short
The projected 2026 refined copper deficit. The International Copper Study Group sits at the low end of that range, J.P. Morgan at the high end. Either way the market is short, not long.
17.9 years to build the answer
Average time from discovery to first production across 239 major copper discoveries, per S&P Global data. In the US it runs closer to 29 years. Copper also traded to an all time high above $14,500 per tonne on the LME in January, which is the market already telling you how it reads the setup.
Mining Visuals, citing S&P Global · LME price via CarbonCredits (2026)
Demand Is Arriving Now. Supply Cannot.
Data: J.P. Morgan and ICSG via CarbonCredits and Skillings (2026); mine lead time from S&P Global · marinelayeradvisors.com/insights
Why This May Be Worth Exploring
It may work in two different regimes. Copper might get bid whether growth is strong (everything being built needs it) or inflation runs hot (physical input priced in dollars), so clients do not have to pick one.
The asymmetry could favor the long side. Demand can inflect in a quarter but supply cannot, since the average copper mine takes 17.9 years from discovery to first production and a demand surprise this decade physically cannot be met with new supply this decade.
The honest tradeoff. If LOCADY never touches plus 30% on a single day, clients get 100% back (or 95% if copper finishes below minus 5% at expiry); if it does trigger, the upside is capped at 20% regardless of how far copper runs, and that cap is the cost of the floor.
The Structure · Protected Upside on Copper
INDICATIVE TERMS · SUBJECT TO FINAL PRICING
1-Year Copper Accelerated Growth Note (95% PPN)
Underlier: LOCADY (LME Grade A Copper official reference price)
Principal protection | 95% at maturity |
Upside trigger | 130% of initial copper price (daily observation) |
If trigger is hit | 20% contingent return on top of 95% principal |
If LOCADY touches 130% of its starting price on any single day during the year, the note locks in a 20% return paid at maturity, for a total of 120% back. If the trigger is never hit, 95% of principal is protected at maturity (worst case: minus 5%).
Terms indicative. Subject to final pricing and issuer availability. Contact us for live quote.
The Payoff
Which clients are asking about commodities, AI infrastructure, or inflation protection?
Send me a name and a notional and I'll get live terms back the same day. What makes the most sense for your clients here?
This material is for informational purposes only and does not constitute a recommendation or an offer to buy or sell any security. AI and data center copper demand estimates (110,000 tonnes of incremental 2026 demand, approximately 475,000 tonnes of total 2026 data center demand, up to 50,000 tonnes per large AI facility) are attributed to JPMorgan / J.P. Morgan research as reported publicly by Skillings and CarbonCredits (2026). The underlying bank research is not publicly hosted, so the public coverage is cited and linked instead. The projected 2026 refined copper deficit range of 150,000 to 330,000 tonnes reflects the International Copper Study Group at the low end and J.P. Morgan at the high end, as reported by CarbonCredits (2026). Mine lead time (17.9 years average from discovery to first production across 239 major copper discoveries, and approximately 29 years in the United States) is S&P Global data as reported by Mining Visuals. The referenced LME all time high above $14,500 per tonne (January) is as reported by CarbonCredits (2026). Forecasts and estimates are those of the cited third parties, are subject to revision, and may prove incorrect. Structured note terms shown are indicative only and are subject to change, final pricing, issuer availability, and issuer credit risk at the time of execution; they do not represent an offer. The 1-Year Accelerated Growth Note references LOCADY (the LME second ring official reference price for cash delivery of Grade A copper, per the London Metal Exchange), not copper miners or the COPX ETF. The 20% contingent return is paid at maturity only if LOCADY touches or exceeds 130% of its initial level on any single daily observation during the note term; if the trigger is never hit, 95% of principal is returned at maturity (maximum loss: 5%). The note pays no dividend, has limited or no interim liquidity, and its upside is capped at 20% regardless of how far LOCADY appreciates. Past performance is not indicative of future results. Structured notes may not be suitable for all investors and involve risks including loss of principal: the 95% protection is an obligation of the issuer, not a guarantee, and an issuer default could result in loss of principal beyond the stated 5%. All market data and third party estimates referenced are as of 09/01/2026.
