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 2040, each requiring copper.
In advanced economies such as the US, reshoring of manufacturing and grid upgrades are also contributing to rising copper intensity.
The energy transition forms the second major pillar of demand growth. Electric vehicles (EVs) require nearly three times as much copper as conventional internal combustion cars, while solar and wind installations are heavily copper-dependent.
In 2025, more than 90 percent of new global power generation capacity came from solar and wind, according to S&P Global. Battery storage, now a growing feature of electricity systems, adds another layer of copper demand.
A fourth, less discussed but increasingly important vector is defense. Rising geopolitical tensions and the electrification of military systems are pushing governments to invest heavily in advanced equipment and infrastructure.
Further, defense-related demand is considered relatively inelastic given national security priorities, and adds further pressure to an already tightening copper balance.
Supply constraints tightens the outlook
Geographically, the demand picture is uneven. S&P Global expects China and the broader Asia-Pacific region to account for about 60 percent of incremental copper demand growth through 2040, driven by electric vehicles, renewable power, grid expansion and continued industrialization.
North America and Europe are also poised for meaningful increases, particularly linked to AI data centers, clean energy deployment and electrification of transport. The Middle East, meanwhile, is forecast to post one of the fastest growth rates in copper demand, reflecting ambitious infrastructure and energy investment plans.
On the supply side, the outlook is far more constrained. Existing copper mines are aging, ore grades are declining, and new discoveries are becoming harder and more expensive to develop.
S&P Global notes that the average copper mine now takes about 17 years to move from discovery to production, with permitting delays, environmental reviews and community consultations accounting for much of that timeline.
Without major new projects, primary mined copper supply is expected to peak around 2030 and then begin to decline.
Recycling will help, but it is not a silver bullet. Even under aggressive assumptions, secondary supply is projected to meet at most about a quarter to a third of total copper demand by 2040. That leaves a substantial gap that can only be filled through new mine development or significant expansions of existing operations.
Overall, the report furthers a crucial message going forward: copper is no longer just a cyclical industrial metal, but a strategic asset tied to the future of energy, technology, and national security.
That demand trajectory, however, is colliding with structural constraints on supply. Mining remains the indispensable foundation of the supply chain, but geology alone will not determine outcomes.
S&P Global concludes that addressing this imbalance will require greater regional diversification and multilateral cooperation to build a more resilient and environmentally robust copper system.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
