IEA recently released its Global Critical Minerals Outlook 2025, where it revealed that refined copper demand rose 3.2% in 2024, up from 2.7% in 2023 and 1.1% in 2022.
Copper prices surged to nearly $10,800 per tonne early in 2024 before falling back. Price hikes came from supply disruptions like the Cobre Panama shutdown and lower output forecasts from Anglo American. Interestingly, rising demand from AI data centers is creating worries about future copper shortages. Experts are weighing in on the fact that copper supply won’t be able to keep up with the fast growth of digital infrastructure.
Copper Demand Shifts Beyond China
- Global refined copper demand (excluding scrap) hit nearly 27 million tonnes in 2024 and is projected to grow to 33 million tonnes by 2035, reaching 37 million tonnes by 2050.
China accounted for almost 60% of demand in 2024, with the U.S. and Germany trailing behind. Early 2025 saw rising copper prices due to U.S. tariffs and a weaker dollar, but fears of a global slowdown and China’s retaliatory tariffs have weighed heavily on prices and demand outlooks.
Copper demand by region in the STEPS
More significantly, India, Saudi Arabia, and Malaysia, driven by fast infrastructure and construction projects, contributed to the copper demand spike. On the contrary, Europe faced its second straight year of copper demand decline amid high inflation and energy costs.
AI and Data Centers Drive Copper Demand Surge
Data centers are becoming a major force behind rising copper demand. In the U.S. alone, new data center capacity is expected to grow by 50 gigawatts (GW) between 2023 and 2028. That’s five times the 10 GW added during 2017-2022.
This rapid growth means a huge need for copper in power systems, cooling, and connectivity. This is because the metal conducts electricity and heat well, lasts long, and is affordable. Each gigawatt of capacity typically uses about 5,500 tonnes of copper.
Estimates of copper use in these centers vary widely by as much as 10X. IEA says copper use in data centers could be between 250,000 and 550,000 tonnes by 2030. That could equal 1 to 2% of global copper demand—and possibly more if AI growth accelerates.
Copper Mine Supply to Peak Soon, Then Decline Sharply
Global mined copper supply reached 22 million tonnes in 2024. Chile leads production, followed by the Democratic Republic of Congo and Peru.
- Supply is set to peak in the late 2020s at just over 24 million tonnes before dropping below 19 million tonnes by 2035 due to falling ore grades and mine closures.
The Democratic Republic of Congo (DRC) is expected to drive significant near-term growth. Major projects like Kamoa-Kakula and Tenke Fungurume could boost output from 900 kilotonnes (kt) in 2024 to over 1.3 million tonnes (Mt) by 2028.
China’s Copper Smelting Boom Sparks Global Supply Crunch
In another report from Bloomberg, we discovered that China’s rapid growth in copper smelting is causing a global squeeze on copper concentrate supply. While China hits record refined output, smelters worldwide suffer losses as treatment charges drop below zero.
Major players like Chile’s Antofagasta are offering negative fees, forcing smelters to pay more for ore than they earn. Smaller smelters, especially outside China’s major buyer groups, face closures, while large, state-owned Chinese smelters stay afloat.
The report highlighted that excess smelting capacity is the real problem, not mining output. Spot treatment charges have plummeted to negative $60 per tonne, hitting smelters globally. Older European smelters are vulnerable, but Japanese smelters with mine ownership may survive longer. The fight to survive is intensifying as China expands its smelting dominance.
2035 Copper Deficit Forecast
Based on current and planned mining projects, the IEA forecasts that the world would face a 30% copper supply deficit by 2035 under the Stated Policies Scenario (STEPS). The gap widens to 35% under the Announced Pledges Scenario (APS), and over 40% in the Net Zero Emissions (NZE) Scenario.
Even in a high production outlook, supply falls short by 20%.
This shortfall begins in the late 2020s, mainly because copper ore grades are dropping. Since 1991, average ore grades have fallen by 40%. Advances like solvent extraction and electrowinning help process lower-grade ores but only partly make up for the decline.
How Will the Copper Industry Sustain Long-Term Demand Growth?
BHP predicts that recycled copper will be critical to meeting demand growth over the next 30 years. However, scrap availability limits recycled supply. The lifespan of copper in products varies widely, from months in consumer electronics to decades in construction, averaging about 20 years in use.
Furthermore, copper reserves and production are concentrated in Latin America, Australia, and Africa. However, the challenge is: the industry must find ways to sustain volume growth amid resource depletion and rising costs.
Closing the Copper Supply Gap
This growing supply deficit highlights major risks to copper security. To meet demand, the industry must boost investment in new mines, improve material efficiency, find substitutes, and increase recycling efforts. Another concern is the lack of diverse copper refining options, which could threaten supply stability.
In short, tackling copper’s supply challenges will require a strong, multiple approach to avoid shortages as demand surges.
