The World’s Copper Squeeze Is Set to Intensify on AI and Defense Spending, S&P Says

Demand and Supply Dynamics - The race for artificial intelligence and increased defense spending are expected to exacerbate a projected copper shortage as producers face challenges in expanding supply [1] - Copper prices have reached record highs above $13,000 per metric ton due to mine outages and stockpiling in the US, indicating a market that may become tighter in the long term [2] Future Demand Projections - S&P Global projects that copper demand will increase by 50% from current levels to 42 million tons by 2040, driven primarily by traditional sectors like construction and transportation, as well as emerging sectors such as electric vehicles and batteries [3] - New demand sources, particularly from data centers and AI infrastructure, are anticipated to surge, with consumption from these sectors expected to triple by 2040, contributing an additional 4 million tons [4] Emerging Technologies and Challenges - The study highlights humanoid robots as a potential new source of copper demand, estimating that 1 billion humanoid robots in operation by 2040 could require about 1.6 million tons of copper annually, which would represent approximately 6% of current consumption [5] - Despite the rising demand, global copper production is projected to peak at around 33 million tons by 2030 due to declining ore quality and challenges in permitting, financing, and construction of new projects [5]