The world’s appetite for copper is set to explode, driven by the dual forces of artificial intelligence and the green energy transition. A new study by S&P Global predicts demand for the red metal will leap 50 percent to 42 million metric tons by 2040, putting immense strain on already tight global supplies.
Context
As the critical component for powering data centers, homes, and military systems, copper has become the choke point of the modern economy.
The Electrification Surge
Daniel Yergin, vice chairman of S&P Global, told CNBC’s “The Exchange” that the projected surge is fundamentally about the electrification of everything. While nearly half of all new copper demand will likely come from the developing world, the infrastructure requirements for the existing grid are staggering. By 2040, the world is expected to consume 50 percent more electricity than it does today.
“That’s like building 650 nuclear power plants every year. Copper is the metal of electrification.”
— Daniel Yergin, Vice Chairman of S&P Global
Traditional utilities have been caught flat-footed by the speed of this shift. After years of planning for flat demand, power companies are facing a shock from the technology sector. Data centers, which consumed about 4 percent of U.S. electricity last year, are on track to devour 14 percent by 2030.
The Supply Lag
None of that happens without copper. Bringing new supply online to meet this crush is not a quick fix. While short-term prices are currently reacting to mine disruptions and tariff uncertainties, the long-term barrier is regulatory and logistical. Governments play a decisive role in whether companies commit capital to exploration.
“It takes an average 17 years to bring on a new copper mine. So you are making a bet on the future when you start a new mine.”
— Daniel Yergin
2.9x
More copper required for EVs compared to standard cars
The competition for the metal is expanding beyond traditional infrastructure. Global sales of EVs recently outpaced total U.S. auto sales by 40 percent. The defense industry is also ramping up consumption.
The market may be severely underestimating how physical resource constraints will cap the digital revolution. Beyond the current tech boom, Yergin identified a new frontier of demand on the horizon: humanoid robots. These machines, heavily wired for movement and processing, would further drain global stockpiles.