Growth in artificial intelligence and defense technologies is set to drive global copper demand up by 50% by 2040, but supply will fall short by more than 10 million metric tons a year unless mining and recycling capacity expands, consultancy S&P Global said on Thursday.
Copper demand is expected to rise to about 42 million metric tons annually by 2040, up from roughly 28 million metric tons in 2025, according to the report. Without additional sources of supply, nearly a quarter of projected demand could go unmet, S&P warned.
Copper is a critical material across construction, transportation, electronics and technology because of its high electrical conductivity, corrosion resistance and ease of use. While electric vehicles have supported copper demand over the past decade, S&P said the next wave of growth will come from AI, defense and robotics, alongside continued consumer demand for appliances such as air conditioners.
“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 and one of the report’s authors, in comments to Reuters.
AI is expected to be a major driver of copper consumption, with more than 100 new data center projects launched last year, valued at nearly $61 billion, Reuters reported previously. Rising defense spending linked to the war in Ukraine and increased military budgets in countries such as Japan and Germany are also likely to add pressure on copper supply.
“Demand for copper really is inelastic in the defense sector,” said Carlos Pascual, an S&P vice president and former U.S. ambassador to Ukraine.
Chile and Peru remain the world’s largest copper producers, while China is the biggest copper smelter. The United States, which has imposed tariffs on some copper products, imports about half of its copper needs annually. The report does not include potential supply from deep-sea mining.
S&P previously published a copper outlook in 2022 tied to achieving global carbon neutrality by 2050. The latest report uses a different methodology and assumes copper demand will continue to grow regardless of government climate policies.
“The politics of the energy transition have changed pretty dramatically,” Yergin said.
