The global landscape for industrial commodities is on the verge of a historic transformation as the dual forces of artificial intelligence and escalating defense requirements prepare to send copper demand soaring. According to a landmark study released Thursday by S&P Global, the world is hurtling toward a 50% increase in copper consumption by 2040, a surge that threatens to outpace current supply capabilities and create a massive structural deficit. The report indicates that annual global demand for the red metal will climb from 28 million metric tons in 2025 to an staggering 42 million metric tons over the next 15 years, primarily driven by the "electrification of everything" and the massive infrastructure needs of the digital age.
S&P Global’s Vice Chairman, Dan Yergin, characterized copper as the indispensable "metal of electrification," noting that while the previous decade was defined by the rise of electric vehicles, the next chapter of growth will be written by the explosive expansion of AI-driven data centers and a global pivot toward modernized military hardware. The consultancy warns that without an immediate and aggressive scale-up in both mining operations and recycling technologies, the global market faces a persistent annual shortfall of more than 10 million metric tons by 2040. This gap represents nearly a quarter of the projected demand, a deficit that could potentially stall technological progress and compromise national security objectives for major world powers.
The rapid proliferation of artificial intelligence is emerging as a primary catalyst for this shift. Last year alone, more than 100 new data center projects were initiated with a combined valuation of roughly $61 billion. These facilities, which form the backbone of the AI revolution, are incredibly copper-intensive, requiring vast amounts of the metal for power distribution, cooling systems, and specialized hardware. S&P Global’s analysis suggests that the combined requirements of AI, data centers, and the global defense sector could triple by 2040, adding four million tons of new consumption to the market. This trend is further amplified by the nascent robotics industry; the report estimates that the deployment of one billion humanoid robots by 2040 could alone account for 1.6 million metric tons of copper annually.
Geopolitical tensions are also playing a decisive role in reshaping the commodity’s future. Increased defense spending in nations like Japan and Germany, coupled with the ongoing conflict in Ukraine, has led to a surge in demand for copper-intensive weaponry and secure communication networks. Carlos Pascual, an S&P Global vice president, emphasized that demand in the defense sector is largely inelastic, meaning nations will likely prioritize securing copper supplies at any cost to maintain military readiness. This strategic urgency was mirrored by the United States’ recent decision to designate copper as a critical mineral, acknowledging that shortages could hamper both economic stability and defense infrastructure.
Regionally, the demand for copper is shifting toward the East, with Asia expected to account for approximately 60% of all incremental demand through 2040. While North America and Europe are seeing smaller surges tied to their respective energy transitions and digitalization efforts, the Middle East is emerging as a high-growth corridor with a projected compound annual growth rate of 4%. As the race for supply intensifies, the industry faces significant hurdles. Traditional mining hubs like Chile and Peru are grappling with maturing mines and regulatory challenges, while China continues to dominate the global smelting capacity. The S&P Global report underscores that the "politics of the energy transition" have shifted, moving away from purely climate-driven policy toward a more pragmatic focus on energy security and technological supremacy, ensuring that copper remains at the heart of the global industrial agenda for decades to come.
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