Quick overview

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The race for artificial intelligence and rising defense spending will exacerbate a predicted copper shortage as producers struggle to grow, according to a recent study by S&P Global.

In a report supported by the mining sector, S&P Global stated on Thursday that demand growth is quickening at the same time that mine supply is reaching structural limits, increasing the possibility that copper will become a barrier to economic expansion and technological advancement.

Copper has risen to record highs above $13,000 per metric ton in London due to numerous mine outages and traders’ efforts to hoard the metal in the US in anticipation of potential tariffs by the Trump administration

Although prices have surpassed levels suggested by underlying consumption due to the flow of copper into US warehouses, new areas of demand indicate an even tighter market in the long run.
According to S&P Global, the demand for copper will increase by 50% from current levels to 42 million metric tons by 2040.

Most copper demand still comes from traditional sources like construction, appliances, transportation, and power generation, but the largest portion of growth is coming from energy-transition uses like batteries, electric vehicles, renewable energy, and grid expansion.

Copper consumption associated with AI infrastructure and data centers is predicted to soar as the installed capacity of data centers worldwide nearly quadruples by 2040. According to the study, demand from AI, data centers, and international defense spending could almost triple by 2040, adding 4 million tons of consumption.

Humanoid robots are another possible source of demand, according to S&P Global. Even though the technology is still in its infancy, 1 billion humanoid robots operating by 2040 would require roughly 1.6 million metric tons of copper.