The number one industrial raw material, copper, could become even more of a focus in the coming years. According to a recent analysis by consulting firm S&P Global, global copper demand will increase significantly by 2040 – driven not only by traditional consumers such as the construction and electrical engineering industries, but also increasingly by artificial intelligence, robotics and the defense sector. At the same time, the report warns of a significant supply gap if recycling and mining are not expanded significantly faster.
S&P Global puts the expected demand in 2040 at around 42 million tonnes per year. By comparison, the study estimates around 28 million tonnes for 2025. This would correspond to an increase of around 50% within 15 years. Without additional sources on the supply side, analysts believe that just under a quarter of this demand could remain unmet – that would be more than 10 million tonnes of copper per year.
Copper Demand: AI, Robotics and Defense are Changing the Demand Structure
Copper has been a basic metal of industry for decades: it conducts electricity very well, is corrosion-resistant and is comparatively easy to shape. Accordingly, it is used in numerous applications – from building technology and transport to electronics and everyday appliances. S&P Global emphasizes that this classic basic demand continues, for example through air conditioning systems and other copper-intensive household appliances.
However, the authors believe that the dynamics emanating from AI and defense applications are new. Data centers are considered to be particularly material- and energy-intensive infrastructure. S&P refers to the strong project pipeline in the data center sector: last year, more than 100 new data center projects with a volume of almost 61 billion US dollars were reported. Such projects require large amounts of electrical infrastructure – and therefore usually also copper.
At the same time, the report sees the defense sector as an additional driver. The war in Ukraine and higher defense spending, for example in Japan and Germany, are likely to further support demand for copper. A central point of the analysis: In the armaments industry, the need is difficult to replace and less price-sensitive – S&P Global speaks of an “inelastic” demand. Since almost every electronic system contains copper, upgrading and higher investments in military technology act as a structural demand boost according to this logic.
Copper Supply Gap: More Recycling and New Mines Required
S&P Global contrasts the expected increase in demand with a critical supply scenario. Without additional supply, an annual gap of more than 10 million tonnes of copper is threatening from 2040. The study names more recycling and more mining as central adjusting screws – i.e. both a stronger recovery from the material cycle and additional primary production.
It is important to note that the report expressly does not include potential future quantities from deep-sea mining. Instead, the analysis concentrates on the expected demand and the foreseeable supply options on land, as well as the potential for a higher recycling rate. This makes the statement clear at its core: Even if the political framework for the energy transition fluctuates, S&P Global sees the demand development as robust – regardless of whether governments actively pursue certain climate targets or not.
S&P Global also points out that the methodology of the new study differs from an earlier publication from 2022. At that time, the focus was on the connection with a “Net-Zero” path by 2050. The current work, on the other hand, relies on a basic scenario: According to this, copper demand will also increase if climate policy is less dominant. According to S&P, the background to this assumption is that “the politics of the energy transition” have changed significantly in recent years.
Copper as the “Metal of Electrification” – and the Role of Supply Chains
The experts summarize it this way: The driving force is the progressive electrification – and copper is the “metal of electrification”. This view underlines why, in addition to classic industries, new technology fields are now also accessing the same raw material.
The report also puts the supply into a global context: Chile and Peru are named as the most important producing countries, while China is considered the largest processor (smelting capacities). For the USA, S&P points out that the country imports about half of its copper needs and has already imposed tariffs on certain copper products. This gives the forecast an additional dimension: Not only the absolute quantity, but also trade flows and industrial policy can influence the market.
The bottom line is that S&P Global paints a scenario in which copper will take on a new strategic importance by 2040 – with growing demands from AI, defense and robotics, as well as a supply side that is unlikely to keep pace without additional recycling and mining capacities.
