The world’s drive to electrify nearly everything — from cars and data centers to defense systems — is running headlong into a harsh reality: there may not be enough copper to go around. According to a new report from S&P Global Energy & Market Intelligence, surging demand for electricity and the metal that powers it could soon outstrip global supply, pushing costs higher across industries.
S&P Global’s latest analysis updated its 2022 findings and the outlook has only worsened. Global electricity consumption is expected to climb nearly 50% by 2040. In the United States, where demand was flat for roughly 25 years, usage is now projected to grow as much as 2.5% annually — enough to double by 2053. China’s electricity use is expanding even faster, with 3.2% annual growth expected to make consumption four times that of the U.S. by 2046. India’s power demand is set to double by 2042, climbing 4.2% a year. Much of the rest of the world is also poised for rapid growth, and large regions such as Africa — home to nearly 20% of the global population — remain severely underserved in electricity access.
Artificial intelligence is one of the biggest new drivers of this global electrification wave. Generative AI and the data centers that power it both depend heavily on copper for computing infrastructure, electrical delivery and cooling systems. S&P Global projects that U.S. data centers alone could grow their share of electricity use from 5% today to 14% by 2030.
That surge comes on top of other expanding needs. Developing nations are expected to add some two billion air conditioners by 2040. Electric vehicles require almost three times as much copper as traditional cars, while renewable technologies — primarily wind and solar power — already account for about 90% of new generation capacity and are copper-intensive by design. Storage batteries, transmission lines and even modern defense systems are consuming growing volumes of the metal, with defense-related copper demand expected to triple by 2040.
Copper’s importance in this electrified economy has led S&P Global to label it a “critical metal.” The report forecasts that worldwide copper demand will rise from 28 million metric tons in 2025 to 42 million metric tons by 2040 — a 50% jump. But without major new investments in supply, the world could face a shortfall of about 10 million metric tons, or nearly 24%.
The challenge lies in the supply chain. Ore grades are declining, extraction costs are climbing and it takes an average of 17 years to develop new mines. Even under optimistic scenarios, recycling could meet only about a third of total copper needs by 2040. Compounding the risk, up to half of global smelting and refining capacity is concentrated in a few geographic regions, especially China, leaving the market exposed to geopolitical or logistical disruptions.
Alternatives exist — such as aluminum, silver, fiber optics and high-grade plastics — but S&P Global notes that substitutions are limited and often less effective. As a result, tight supply and high demand have already pushed up prices: copper spot prices have soared more than 45% over the past year alone.
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