Copper supplies set to peak just as tech needs more

Concerns are mounting over copper supplies, with a fresh study warning that demand will likely outstrip production within decade, threatening to constrain global technological advancement.

Electrification of industry, electric vehicles, and the AI-driven boom in IT infrastructure are all fueling demand for copper, used for everything from cabling to chip interconnects.

However, a study by financial analyst S&P Global estimates that worldwide production of the metal will peak in 2030 at 33 million metric tons, while demand is forecast to continue growing to reach 42 million metric tons by 2040 - a 50 percent increase from current levels, creating a supply shortfall of about 10 million metric tons without meaningful expansion.

The result? Soaring copper prices, making electrical goods and IT kit costlier to produce. The metal already hit a historical high of $5.84 per pound in late 2025, according to some sources.

Although S&P labels its report "Copper in the Age of AI," the datacenter boom is not the largest consumer. Instead, core economic demand - domestic electrification worldwide, including in developing countries - leads the charge. Electric vehicles, solar and wind generation (more than 90 percent of new generating capacity installed globally in 2025), plus expanding transmission infrastructure all add pressure.

Yet while global demand accelerates, current supply is set to decline as existing resources deplete, S&P warns.

Primary supply from mining copper faces declining ore grades, rising costs, and increasingly complex extraction. Bringing new mines into use also involves long timescales, averaging 17 years.

Another report last year from PricewaterhouseCoopers (PwC) suggested that climate change threatens copper mines, which require steady water supplies but are often located in drought-risk regions.

Secondary supply from recycled sources can't close the gap, S&P says. While telcos transitioning to fiber-optic cabling may free up 800,000 metric tons of copper wiring, the analyst projects recycling will provide only a third of total supply by 2040, leaving a substantial shortfall even with aggressive collection improvements.

Meeting rising demand requires considerable effort and innovation. S&P calls for streamlined permitting to shorten mine development timelines, stable investment frameworks, new technology, and expanded processing capacity beyond existing hubs.

China presents a particular concern: with 40 to 50 percent of global copper smelting and refining capacity, the concentration "amplifies systemic risks and exposes the supply chain to geopolitical shocks" - echoing fears over China's dominance of rare earth minerals and legacy semiconductors.

Primary production remains the only real solution to bridging the gap, S&P concludes, but ramping up mining output will require effort and investment.

"Future copper supply depends not only on geology, engineering, logistics, and investment, but also on governance and policies," the report states, noting that smelting and refining also form a critical node in the supply chain, especially as capacity is concentrated in a limited number of countries.

"Building a more resilient global copper system requires multilateral cooperation and more regional diversification," it says.

Sadly, multilateral cooperation itself seems in short supply in the current geopolitical climate. ®