The demand for copper is expected to grow by 50 percent by 2040 due to growth in artificial intelligence (AI) and the defense sector.
According to S&P Global’s consultancy, annual supply is expected to be short by over 10,000,000 metric tons, unless mining and recycling efforts are stepped up.
Copper is a popular metal because of its physical and chemical characteristics, which make it indispensable in many sectors.
Copper demand is on the rise, but supply challenges are also growing.
The fact that copper is one of the most effective conductors for electricity is the primary reason why it’s used so extensively in electronics and the power transmission industry.
Its inherent corrosion resistance ensures durability, especially in construction and infrastructure applications.
The malleability of copper and its ductility make it easy to shape into sheets, wires and pipes. This is important for both manufacturing and transport.
Copper’s combined properties make it a crucial material in modern technology.
S&P report, according to Reuters indicates that the demand for copper will increase even more over the next fourteen years. The electric vehicle industry has boosted the demand of the metal in the past decade.
The AI, robotics, and defense industries will drive this increase in demand, as well as the constant consumer demand for air conditioners.
According to a report, global demand will increase dramatically, from 28 millions metric tonnes in 2025, to 42,000,000 metric tons per year by 2040.
S&P’s report also indicated that without additional supply, nearly a quarter (25%) of the projected demand would likely not be met.
In a Reuters article, Dan Yergin was quoted as saying, “The underlying factor is electrification, and copper the metal for electrification.”
AI boosts copper demand
AI has a significant impact on the demand for copper. This is due to the building of many new data centres.
Over 100 data centers were started in the last year, valued at over $61 billion.
The copper industry’s vital role in the development of artificial intelligence is highlighted by this substantial investment.
S&P also stated that demand for copper is likely to be stimulated by the war in Ukraine and the efforts of countries like Japan, Germany, and France to increase their defense spending.
Copper is a key component of almost all electronic products.
China is the world’s largest copper smelter. Chile and Peru, however, are leading copper miners. US imports meet half its copper needs and there is a tax on some categories.
S&P published a similar report in 2022 that forecasted copper demand under the scenario of achieving carbon neutrality, or “net zero”, by 2050.
The current report does not include any supply that could be derived from the deep sea mining.
S&P has announced that its report released on Thursday uses a new method. The base case assumption is that the growth in copper demand will not be affected by government climate policies.
The content of this post Copper Demand to Surge 50% by 2040, Driven by AI and Defense, Says S&P, may change as new information becomes available.
