- Global demand for copper will soon exceed supply by millions of metric tons, experts warn
- Recycling alone cannot meet the growing demand for copper in the next two decades
- China controls almost half of the world’s copper smelting and refining capacity.
Experts have warned that demand for copper continues to rise as electrification expands in transportation, power generation and industrial systems, and potential shortages may not be far away.
Electric vehicles, grid upgrades, renewable energy installations, and data center infrastructure rely heavily on copper for wiring, motors, and interconnections.
Even components closely tied to a high-speed CPU and memory subsystems rely on dense copper vias at both the board and installation levels.
Projected supply and demand gap
S&P Global analysts have estimated that global demand could reach 42 million metric tons by 2040, representing approximately a 50% increase from current consumption levels.
Production is expected to peak much sooner, with S&P Global projecting peak production of around 33 million metric tons around 2030, implying a potential shortfall of about 10 million metric tons if current trends remain unchanged.
Primary copper mining faces declining ore grades, rising costs and increasingly complex extraction.
Bringing new mines online also involves long lead times, with an average of 17 years. These delays limit how quickly supply can respond to increased demand, even when prices indicate shortages.
Another recent report from PricewaterhouseCoopers suggested that climate change threatens copper mines, which require a constant supply of water but often operate in regions at risk of drought.
Environmental stress, regulatory hurdles and capital intensity are combining to slow the expansion of new production capacity, and secondary sourcing from recycled sources cannot close the gap, according to S&P analysis.
While telecommunications companies’ transition to fiber optic cabling can free up 800,000 metric tons of copper cabling, the contribution remains limited.
Recycling is expected to account for only about a third of total supply by 2040, even under optimistic collection assumptions.
China holds between 40 and 50% of the world’s copper smelting and refining capacity, creating vulnerabilities linked to geographic concentration.
This concentration amplifies systemic risks across industries that rely on electrical infrastructure, from power grids to servers built around DDR5 memory channels.
Analysts warn that this concentration increases exposure to geopolitical shocks and broader supply disruptions.
Similar concerns have previously arisen around rare earth minerals and legacy semiconductor manufacturing.
S&P highlights the need to expand processing capacity beyond existing centers to reduce dependence on a narrow set of regions.
Some technology leaders, including Broadcom’s CEO, say silicon photonics, which uses light instead of copper for connections, won’t see widespread use anytime soon.
Others point out that GPUs are still expensive, but still rely heavily on copper for wiring, cooling and power, so demand for copper remains high.
Ayar Labs, the Nvidia-backed photonics startup, is targeting hyperscale customers with GUC design collaboration, but these efforts still rely on physical infrastructure that remains copper-intensive.
Primary production remains the only practical path to closing the gap, S&P concludes.
The scale of projected demand growth suggests that without faster permitting, broader investment and genuine multilateral cooperation, copper’s constraints are likely to persist.
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