What is the story about?
The world could be heading towards a major copper shortage as the rapid expansion of artificial intelligence, defence and robotics is set to push global demand for the metal nearly 50 per cent higher by 2040, according to a new report by S&P Global.
The consultancy estimates that annual copper demand will rise to around 42 million tonnes by 2040, up from 28 million tonnes in 2025. However, without a sharp increase in mining and recycling, global supplies are expected to fall short by more than 10 million tonnes a year—leaving nearly a quarter of total demand unmet.
S&P said the next phase of copper consumption will be driven less by climate policies and more by the accelerating electrification of the global economy, led by AI infrastructure, hyperscale data centres, defence equipment and industrial robotics.
“The underlying demand factor here is electrification of the world, and copper is the metal of electrification,” said Dan Yergin, vice-chairman of S&P Global.
While electric vehicles lifted copper demand over the past decade, the consultancy expects digital infrastructure to emerge as the dominant driver in the coming years.
More than 100 new data centre projects were launched globally last year, underlining the speed at which copper-intensive infrastructure is expanding.
Rising geopolitical tensions are also adding to demand. Higher defence spending by countries such as Japan and Germany, as well as the ongoing conflict in Ukraine, are expected to further tighten copper markets.
“Demand for copper is highly inelastic in the defence sector,” said Carlos Pascual, vice-president at S&P Global and former US ambassador to Ukraine. Chile and Peru remain the world’s largest copper producers, while China dominates global smelting capacity. The United States currently imports about half of its copper requirements and has imposed tariffs on some copper products, a factor that could further strain supplies.
Unlike earlier forecasts centred on ‘net zero’ climate targets, S&P said its latest projections assume copper demand will continue to rise regardless of government climate policies.
“The politics of the energy transition have changed dramatically,” Yergin said, adding that electrification-led demand will remain the key driver of the copper market over the next two decades.
The consultancy estimates that annual copper demand will rise to around 42 million tonnes by 2040, up from 28 million tonnes in 2025. However, without a sharp increase in mining and recycling, global supplies are expected to fall short by more than 10 million tonnes a year—leaving nearly a quarter of total demand unmet.
S&P said the next phase of copper consumption will be driven less by climate policies and more by the accelerating electrification of the global economy, led by AI infrastructure, hyperscale data centres, defence equipment and industrial robotics.
“The underlying demand factor here is electrification of the world, and copper is the metal of electrification,” said Dan Yergin, vice-chairman of S&P Global.
While electric vehicles lifted copper demand over the past decade, the consultancy expects digital infrastructure to emerge as the dominant driver in the coming years.
More than 100 new data centre projects were launched globally last year, underlining the speed at which copper-intensive infrastructure is expanding.
Rising geopolitical tensions are also adding to demand. Higher defence spending by countries such as Japan and Germany, as well as the ongoing conflict in Ukraine, are expected to further tighten copper markets.
“Demand for copper is highly inelastic in the defence sector,” said Carlos Pascual, vice-president at S&P Global and former US ambassador to Ukraine. Chile and Peru remain the world’s largest copper producers, while China dominates global smelting capacity. The United States currently imports about half of its copper requirements and has imposed tariffs on some copper products, a factor that could further strain supplies.
Unlike earlier forecasts centred on ‘net zero’ climate targets, S&P said its latest projections assume copper demand will continue to rise regardless of government climate policies.
“The politics of the energy transition have changed dramatically,” Yergin said, adding that electrification-led demand will remain the key driver of the copper market over the next two decades.
