S&P Global has issued a stark warning regarding the copper sector, signaling that soaring demand coupled with constrained supply could lead to a gap exceeding 10 million metric tons by the year 2040. This shortfall would leave almost one-quarter of copper demand unmet unless substantial increases in mining and recycling activities occur. The company’s Copper in the Age of AI report, published recently, underlines how technological and energy sector shifts are poised to significantly reshape copper consumption patterns.
Demand for copper is projected to jump dramatically, reaching 42 million metric tons annually by 2040; this represents a 50% increase compared to 2025 figures. Central to this surge are sectors that include artificial intelligence, defense capabilities, and robotics, with strong momentum coming from China and countries within the Asia-Pacific region. These areas are expected to drive much of the expansion in copper usage in the coming decades.
One of the most critical contributors to this demand growth will be the global energy transition. Between 2025 and 2040, energy-related applications are anticipated to require an additional 7.1 million metric tons of copper annually. This trend highlights copper’s essential role in developing renewable energy infrastructure and electrification efforts worldwide.
Meanwhile, geopolitical dynamics also play a pivotal role. The ongoing conflict in Ukraine alongside increased defense expenditure by nations such as Japan and Germany are influencing copper demand upward. These countries’ efforts to bolster defense readiness translate into higher requirements for this versatile metal.
S&P Global emphasizes the risks emerging from the intersection of rapidly escalating demand, supply limitations, and concentrated processing capacities. This combination generates systemic vulnerabilities that necessitate coordinated attention and intervention from government policymakers, regulatory bodies, the industry itself, and investors alike.
The present market context has already reflected some of these pressures. Since the beginning of the year, copper prices have surged past $13,000 per metric ton due to concerns about supply disruptions and trade-related complications. Copper’s strategic importance in electric vehicles and household appliances has propelled a price increase of over 43% throughout 2025, marking its strongest performance since 2009.
Factors such as operational challenges at major mines in Indonesia and the Democratic Republic of Congo, compounded by labor strikes in Chile, have diminished available buffer inventories and rekindled speculative demand. Industry analysts caution that these issues reveal underlying structural weaknesses rather than temporary fluctuations in supply.
Compounding price pressures, stockpiling activity within the United States has surged, driven by uncertainty surrounding tariff policies implemented during President Donald Trump's administration. This has led many market participants to redirect copper shipments into American warehouse facilities, thereby tightening global availability and pushing prices upward.
S&P Global’s outlook suggests that global copper production is likely to peak around 2030 and subsequently decline despite ongoing growth in demand. This trend underscores the urgency of scaling up production capabilities and enhancing recycling measures to avoid severe market imbalances.
Investment sentiment in related equity instruments has responded strongly. Over the past year, the Global X Copper Miners ETF (NYSE:COPX) experienced a notable appreciation of 92.44%, while the United States Copper Index Fund (NYSE:CPER) increased by 34.29%, reflecting heightened investor interest in copper mining and extraction corporations.
Overall, the forecasts present a compelling narrative for copper as a critical material underpinning technological innovation and the global energy transition, while also raising concerns about supply resilience and market stability. Addressing these systemic risks will require coordinated efforts across multiple stakeholders to ensure a sustainable balance between copper supply and demand going forward.