The future relies on copper, yet an impending supply gap poses a ‘systemic threat’ to the economy and could become a key strategic issue, according to S&P Global.

Copper’s Critical Role in the Global Economy

Copper has traditionally served as a key indicator of economic health due to its widespread use in various industries. However, S&P Global warns that surging demand is transforming copper into a strategic chokepoint that could hinder future economic expansion.

According to a recent report, researchers project that copper demand will soar by 50% to reach 42 million metric tons by 2040. At the same time, supply is expected to contract, setting the stage for a significant deficit.

This looming gap—estimated at 10 million tons—poses a “systemic risk” to global industries, technological progress, and economic growth, the report cautions.

In recent months, copper prices have climbed sharply, exceeding $13,000 per metric ton, up from just above $8,000 in April 2025. Contributing factors include global tariffs imposed by President Donald Trump and disruptions in mining operations. Other industrial metals such as gold, silver, palladium, and platinum have also experienced notable price increases.

Main Drivers of Copper Demand

• Core economic sectors
• The shift towards electrification
• Expansion of data centers fueling artificial intelligence
• Advanced military technologies

The report also points to humanoid robots as a potential new source of demand, with projections suggesting there could be between 1 billion and 10 billion in use by 2040.

“The future will not only require more copper—it will depend on it. From new construction and digital infrastructure to renewable energy, vehicles, and sophisticated defense systems, copper is at the heart of progress,” stated Aurian De La Noue, executive director for critical minerals and energy transition consulting at S&P Global Energy, in a statement.

He emphasized that international collaboration and diversifying supply sources are essential to building a more robust global copper supply chain, especially as copper becomes central to electrification, digital transformation, and security in the AI era.

Challenges in Expanding Copper Supply

Boosting mining output is vital to meet rising demand, but developing a new copper mine typically takes 17 years from discovery to production. Multiple challenges—including geological, engineering, logistical, regulatory, and environmental hurdles—further complicate efforts to increase supply.

S&P Global also highlights the risks associated with the concentration of copper mining and processing. Just six nations are responsible for about two-thirds of global copper production, while China alone accounts for roughly 40% of the world’s smelting capacity.

China’s dominance in rare earth minerals—crucial for many modern technologies—has already been used as leverage in geopolitical disputes with countries such as the United States and Japan.

Geopolitical and Supply Chain Risks

The report warns that relying on a small group of countries for copper leaves the global market exposed to disruptions, policy changes, and trade restrictions.

“Over the past five years, several nations—including the United States in 2025—have classified copper as a ‘critical metal,’ and for good reason,” said Carlos Pascual, senior vice president for geopolitics and international affairs at S&P Global Energy.

“Copper serves as the vital link connecting machinery, digital systems, transportation, infrastructure, communications, and security. Ensuring future copper availability is now a strategic priority.”