GLOBAL copper consumption is set to surge 50% by 2040, driven primarily by artificial intelligence and defence sectors, said Reuters citing a report published on Thursday by consultancy S&P Global.
The study forecasts annual demand reaching 42 million tons by 2040, up from 28Mt this year. However, supply constraints could leave a shortfall exceeding 10Mt yearly without increased mining and recycling efforts.
“The underlying demand factor here is electrification of the world, and copper is the metal of electrification,” said Dan Yergin, S&P’s vice chairman and report co-author.
Whilst electric vehicles have driven copper consumption over the past decade, emerging technologies including AI, robotics and defence systems will intensify pressure on supplies during the next 14 years. Traditional demand for air conditioners and household appliances adds further strain.
Data centres represent a significant growth area, with over 100 new projects valued at nearly $61bn launched last year. Defence spending increases by Japan, Germany and others, alongside the Ukraine conflict, will compound demand pressures.
“Demand for copper really is inelastic in the defence sector,” noted Carlos Pascual, an S&P vice president and former US ambassador to Ukraine.
Chile and Peru dominate mining production, whilst China leads smelting operations. The United States, which has imposed tariffs on certain copper types, imports half its annual requirements.
Reuters said the analysis excluded potential deep-sea mining sources and employs different methodology from S&P’s 2022 report, which examined copper demand under net-zero carbon scenarios.
“The politics of the energy transition have changed pretty dramatically,” Yergin said.
