Supercycle of Copper: AI and EVs Drive a Strategic Metal into Structural Shortage

Two strong forces come together: the worldwide shift toward electric cars and the exponential development of data centers and AI infrastructure, therefore accelerating copper demand. With their batteries, motors, and charging systems, EVs use about 3 to 4 times more copper than conventional automobiles, therefore generating millions of tonnes of fresh demand as fleets all around electrify. Concurrently, copper is becoming a fundamental enabler of the digital economy, supporting the cabling, power networks, and grid upgrades necessary for AI-driven data centers.

Data centers alone are set to become a significant structural demand pillar; AI-related installations are expected to use nearly 14% of United States energy by 2030, rising from roughly 5% now. This rise in power consumption translates into substantial copper needs for cables, transformers, cooling systems, and grid links, so pushing predicted demand of around 400,000–572,000 tonnes per year by 2028. These patterns are transforming copper into a crucial strategic material together with the general electrification of infrastructure and transportation.

The industry is having trouble keeping up on the supply side. Expected global copper shortfalls of around 160,000–330,000 tonnes by 2026 are poised to grow into multimilliontonne shortages by the 2030s as interruptions like the Grasberg mine force majeure in Indonesia and delays at projects such as Quebrada Blanca in Chile restrict production. With new mines taking 16 or more years to move from discovery to production—essentially requiring one major new mine every year just to balance demand—analysts see prices averaging around USD 11,000–12,000 per tonne in 2026 and potentially peaking in the USD 12,000–15,000 range. Driving roughly 60% of the world's copper demand growth through 2040, Asia-Pacific will confirm copper's position at the crossroads of electrification, artificial intelligence, and geopolitical resource rivalry.