The global copper demand is anticipated to increase greatly in the next few decades because of the growing use of Artificial Intelligence applications.
Estimated to rise from the current copper demand of around 28 million metric tons to around 42 million metric tons of copper in the year 2040, copper demand could see an increase of nearly 50%, according to the special report "Copper in the Age of AI" published by S&P Global. Such factors, including the development of digital infrastructure powered by AI, have been identified to contribute to the rise in demand for copper.
Infrastructure of Artificial Intelligence as a New Demand Driver
Although copper consumption has traditionally been seen in the electrification and transition technology sectors, S&P Global points AI technology as another emerging area that has become an underappreciated driver for copper demand. In fact, AI technology relies on data centers that function on an enormous amount of electricity which in turn needs an immense amount of wiring that is only done using copper.
As stated in the report, the growth in hyperscale data centers around the world that support AI compute workloads are projected to fuel a sharp increase in the use of copper in the digital infrastructure ecosystem. This demand for copper-intensive hardware is driven by the adoption of AI in sectors such as manufacturing, finance, health, and transport.
Larger Electrification Trends Support Requirement
Aside from AI applications, other areas that S&P Global identifies which will continue to drive the usage of copper include electric vehicles, renewable energy production, and power transmission. Compared to gasoline-powered cars, electric vehicles consume more copper, while wind, solar, and energy storage projects utilize a lot of copper.
The intersection of Artificial Intelligence development and the transition in the energy sector is anticipated to drive continuous positive pressures on copper demand until the end of the projection period in 2040.
Supply-Side Constraints and Market Risks
However, it also points out that supply prospects look less promising than robust demand. S&P Global reported that ore grades decline, mine development timelines lengthen, and capital costs rise-higher regulatory and environmental scrutiny is placing restrictions on new supply.
New copper projects often take more than a decade to move from discovery into production, placing significant constraints on the short-term flexibility of the industry. For this reason, S&P Global warns of a growing risk of structural supply deficits unless investment in new mining capacity, recycling, and efficiency improvements accelerates.
Implications for Prices and Policy
For the long term, persistent supply-demand imbalances are likely to keep copper prices higher and markets more volatile. According to the report, copper should be considered a critical mineral by governments and industry stakeholders, especially as it plays a crucial role in both digitalization and decarbonization.
The report concludes by highlighting the need for better, coordinated strategies in terms of extended exploration, speedier project approvals, and improved rates of recycling, supported by technological innovation.
Outlook
As the world is transformed by AI technology in the global economy, copper is predicted to be a crucial but secondary player in this process. As stated by S&P Global, a new structural paradigm triggered by the growth of AI and the phenomenon of electrification has deemed copper one of the most important commodities of the next several generations.
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BASUNDE, Rohini（Global PR & Reporter ）
Based in India, Rohini works as a Reporter and Global PR professional,
leveraging her strong background in culture, society, and media studies.
Her work primarily involves article writing and managing global public relations campaigns.
Her core areas of interest are multiculturalism, intercultural understanding, and cross-cultural communication,
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