Key Points
- Global copper demand may climb 50% by 2040, largely driven by artificial intelligence and defence needs.
- Without more mining and recycling, annual supply could lag demand by over 10 million tonnes.
- Electrification trends and tech infrastructure expansion place added strain on copper markets.
A new report from S&P Global finds that artificial intelligence and defence growth will dramatically increase copper demand by 2040.
Global consumption could reach roughly 42 million metric tonnes per year by 2040, up from about 28 million metric tonnes in 2025.
S&P Global warns supplies risk falling short by more than 10 million metric tonnes annually without boosting mining and recycling efforts. Researchers describe copper as critical to electrification and technological infrastructure.
The metal’s excellent conductivity and versatility make it indispensable across sectors from construction to digital technology.
Electric vehicles and renewable energy previously lifted copper demand, but new forces loom larger. The report notes that growth in AI data centres adds substantial copper needs.
Last year saw more than 100 new data centre projects tied to AI infrastructure. Defence spending expansions in nations such as Japan and Germany will also contribute to higher copper use.
S&P’s authors highlight that demand for copper in defence contexts tends to be inelastic. Nearly every electronic device contains copper wiring or components, underpinning its wide applicability.
Chile and Peru remain the world’s largest copper producers by mining output. China leads in refining and smelting copper, processing much of the global supply.
The United States imports about half of its copper needs and enforces tariffs on some types of the metal. S&P highlights that the report does not consider deep-sea mining as a future source.
S&P’s forecast assumes copper demand rises regardless of national climate policy goals. Global electrification – powering homes, transportation and digital infrastructure – remains a key driver behind the projected demand growth.
The consultancy says expanding recycled copper output could help ease supply gaps, but mining expansion is crucial. Many existing copper mines are aging and lack the capacity to meet future demand without new investments.
Developing new mining operations typically takes years of exploration, permitting and infrastructure work.
Higher copper prices could spur more mining activity, but market signals must remain strong to justify investment. Record copper pricing reflects tightening markets and concerns over future availability.
Some analysts say speculative pressures also influence current metals pricing. Policymakers and industry leaders may need to coordinate to prevent long-term supply bottlenecks.
Copper supply shortfalls could blunt progress in electrification and AI infrastructure deployment. Insufficient copper could slow green energy transition efforts and economic growth in key regions.
Investors in mining and critical materials markets are watching developments closely. How governments and industry respond to these forecasts may influence future commodity markets.
