AI and Defence Growth to Drive 50% Surge in Copper Demand by 2040, S&P Warns
Global copper demand is projected to soar by 50% by 2040, driven by rapid growth in artificial intelligence, defence and robotics industries, according to a new report by S&P Global. However, the consultancy warned that without significant investment in new mines and recycling infrastructure, global supply could fall short by more than 10 million metric tons annually.
Copper Demand to Reach 42 Million Tons a Year
S&P Global’s analysis forecasts that annual copper consumption will reach 42 million metric tons by 2040, up from 28 million metric tons in 2025. The study found that nearly a quarter of that demand could remain unmet unless production expands.
“The underlying demand factor here is electrification of the world, and copper is the metal of electrification,” said Dan Yergin, S&P’s vice chairman and one of the report’s authors.
Traditionally used across construction, transport and electronics, copper’s role is set to grow as industries embrace automation and energy-efficient technologies. While electric vehicles have boosted copper demand over the past decade, S&P said the next wave of growth will come from AI data centres, defence systems and robotics, alongside continued consumer demand for copper-intensive appliances such as air conditioners.
Defence and AI Industries Fuel Copper Growth
The report cited a surge in AI-related infrastructure as a key driver of future demand. More than 100 new data centre projects valued at nearly $61 billion were launched last year alone, reflecting the global push to expand computing capacity.
Defence spending is another significant factor. The conflict in Ukraine and renewed investments by Japan, Germany and other nations have increased the need for copper-based electronics and military systems. “Demand for copper really is inelastic in the defence sector,” said Carlos Pascual, S&P vice president and former U.S. ambassador to Ukraine.
Supply Gaps and Shifting Energy Politics
Chile and Peru remain the world’s leading copper producers, while China dominates smelting. The United States, which imports roughly half its copper needs and has imposed tariffs on some imports, faces additional challenges in securing supply. The report did not account for potential contributions from deep-sea mining, leaving open questions about future resource availability.
Unlike S&P’s 2022 “net zero” forecast, which modelled demand under global carbon neutrality goals, the new report uses a base-case scenario that assumes demand growth will continue regardless of government climate policies. “The politics of the energy transition have changed pretty dramatically,” Yergin said, noting that AI and defence are now overtaking green energy as the main drivers of copper consumption.
with inputs from Reuters
