S&P Global: Copper Becoming One of the World’s Most Strategic Commodities
Copper’s role in the global economy is entering a new phase.
A sweeping new outlook from S&P Global frames the metal as a central bottleneck of the electrified future, projecting that global copper demand will rise by roughly 50 percent over the next 15 years, from about 28 million metric tons in 2025 to 42 million metric tons by 2040.
The challenge, the report warns, is that supply is nowhere near positioned to keep pace.
Without substantial new investment in mining and processing, S&P Global estimates the market could face a copper shortfall of as much as 10 million metric tons by 2040.
Four vectors driving demand
S&P Global groups copper demand growth into four distinct but overlapping “vectors” that together explain the scale and persistence of the coming surge.
At the core of the demand surge is electrification. The research firm expects global electricity consumption to rise by nearly 50 percent by 2040, outpacing growth in any other form of energy.
Copper is essential at every stage of that system, from power generation and transmission to end use in buildings, vehicles, and industrial equipment. What has changed in recent years, however, is the pace of electrification and the emergence of new demand vectors layered on top of traditional uses.
Artificial intelligence (AI) is the most recent and most visible of those new forces. While AI research has been underway for decades, its commercial breakout in late 2022 triggered what many analysts now describe as an “AI arms race,” centered on massive investments in data centers, chips and supporting power infrastructure.
Data centers are among the most electricity-intensive facilities in the modern economy, and copper is critical to their wiring, cooling systems, and grid connections.
S&P Global estimates that data centers could account for as much as 14 percent of total US electricity demand by 2030, up from about 5 percent today.
The knock-on effects are substantial. New data centers require expanded transmission, additional power generation capacity, and increasingly sophisticated cooling systems—all of which are copper-intensive.
Despite the attention AI is drawing, it is not the single largest driver of copper consumption. Core economic demand, often referred to as “Dr. Copper” because of the metal’s sensitivity to economic health, remains the backbone of the market.
Construction, machinery, appliances, transportation, and conventional power generation together still account for the largest share of copper use globally. S&P Global forecasts that this traditional demand will grow at about 2 percent annually through 2040, rising from roughly 18 million metric tons in 2025 to around 23 million metric tons.
Much of that growth is expected to come from developing economies. One striking example cited in the report is cooling: the developing world is projected to add as many as two billion new air conditioners by…
