【Ferro-alloys.com】：A widening gap between copper supply and demand is emerging as a critical issue for the global economy, driven by accelerating electrification and the rapid expansion of new technologies. According to Copper in the Age of AI: The Challenges of Electrification, a recent study by S&P Global, the imbalance represents a “systemic risk for global industries, technological advancement and economic growth.”

The tension is clear: copper underpins the technologies driving modern growth, but demand is rising faster than supply can respond.

Demand Set to Rise Sharply by 2040

The study projects that global copper demand will reach 42 million metric tons by 2040, a 50% increase from current levels. This surge is closely tied to the accelerating pace of electrification.

Electricity demand alone is expected to grow by nearly 50% over the same period. Meeting that demand would require adding the equivalent of roughly 330 Hoover Dams, or more than 650 one-gigawatt nuclear reactors, each year through 2040—expansion that depends heavily on copper-intensive infrastructure.

Core Growth Drivers of Copper Demand

Demand growth is being shaped by several key sectors, led by traditional economic uses and energy transition technologies.

Core Economic Demand

Conventional uses—including construction, electric appliances, transportation, and power generation—remain the largest share of consumption. These sectors are projected to reach 23 million metric tons by 2040, accounting for 53% of total demand.

Energy Transition and Electrification

The energy transition represents the fastest-growing source of copper demand. This includes electric vehicles, battery storage, renewable power capacity, grid infrastructure, and electrification in developing markets. Combined, these uses are expected to grow by more than 7 million metric tons, reaching 15.7 million metric tons by 2040.

Even on their own, these two categories are expected to push demand more than 7 million metric tons beyond available supply.

Emerging Pressures: AI, Data Centers, and Defense

Newer demand drivers are adding further strain on already tight supply conditions.

“Here, in short, is the quandary: copper is the great enabler of electrification, but the accelerating pace of electrification is an increasing challenge for copper,” said Daniel Yergin, Vice Chairman, S&P Global who co-chaired the study. “Economic demand, grid expansion, renewable generation, AI computation, digital industries, electric vehicles and defense are scaling all at once—and supply is not on track to keep pace. At stake is whether copper remains an enabler of progress or becomes a bottleneck to growth and innovation.”

Artificial intelligence and data centers are expected to expand rapidly, with total installed capacity projected at roughly 550 gigawatts by 2040—more than five times 2022 levels. At the same time, global defense spending could double to $6 trillion amid rising geopolitical tensions.

Together, demand from AI, data centers, and defense is projected to roughly triple, adding a combined 4 million metric tons of copper demand.

The study also highlights a potential fifth demand vector: humanoid robots. While still in early stages, projections suggest that one billion humanoid robots in operation by 2040 would require about 1.6 million metric tons of copper annually—equivalent to roughly 6% of current demand.

Supply Constraints and a Growing Deficit

Despite the strong demand outlook, supply is expected to fall short. Global copper production is projected to peak at 33 million metric tons in 2030 before declining.

By 2040, the resulting gap could reach 10 million metric tons—approximately 25% below projected demand.

This shortfall is expected even as recycled copper supply more than doubles, rising from 4 million metric tons today to 10 million metric tons by 2040.

The Challenge of Expanding Supply

Meeting demand will depend heavily on expanding primary copper production, particularly through new mining projects and the expansion of existing assets. The study estimates that an additional 10 million metric tons of primary supply will be required by 2040.

However, without significant investment, global primary supply could fall to 22 million metric tons—below current levels.

Developing new supply presents considerable challenges. Mining operations face declining ore grades, rising costs, increasingly complex extraction conditions, environmental opposition, and lengthy regulatory processes. On average, it takes 17 years for a new copper mine to move from discovery to production.

“Primary production—mining—remains the irreplaceable foundation of copper supply,” said Eleonor Kramarz, Global Head of Critical Minerals and Energy Transition Consulting, S&P Global Energy. “Bridging the impending supply gap depends not only on geology, engineering, and logistics and investment, but also on governance and policies. That translates into timeliness in permitting and consultation, a time clock on litigation and stability in governance and regulation. The alternative is uncertainty, and uncertainty comes at a hefty cost.”

Supply Chain Concentration Risks

The structure of the global copper supply chain adds further complexity. Roughly two-thirds of mining production is concentrated in six countries, while processing capacity is even more centralized.

China accounts for approximately 40% of global smelting capacity and 66% of imports of copper concentrate, making the system vulnerable to disruptions, policy shifts, and trade constraints.

Strategic Importance of Copper

Governments are increasingly recognizing copper as a strategic resource. Several countries have designated it a “critical metal” in recent years, including the United States in 2025.

“Several countries have deemed copper a ‘critical metal’ over the past half decade, including, in 2025, the United States. And with good reason,” said Carlos Pascual, Senior Vice President, Geopolitics and International Affairs, S&P Global Energy and study co-chair. “Copper is the connective artery linking physical machinery, digital intelligence, mobility, infrastructure, communication and security systems; the future availability of copper has become a matter of strategic importance.”

Closing the Gap

Addressing the supply-demand imbalance will require a combination of increased investment, expanded mining capacity, and more efficient regulatory frameworks. Recycling will play an important supporting role but will not fully offset the deficit.

“Multilateral cooperation and regional diversification will be crucial to ensure a more resilient global copper system—one commensurate with copper’s role as the linchpin of electrification, digitalization and security in the age of AI,” said Aurian De La Noue, Executive Director, Critical Minerals and Energy Transition Consulting, S&P Global Energy.

A Critical Inflection Point

The outlook underscores a broader challenge: copper is essential to the systems driving electrification, digitalization, and global growth, yet supply constraints risk limiting that progress.

Whether copper continues to enable technological and economic advancement—or becomes a bottleneck—will depend on how quickly and effectively the global industry and policymakers respond.

• [Editor:Alakay]