Copper, the backbone of electrification, is essential for global decarbonisation, with Wood Mackenzie warning of a growing supply-demand gap.
“The spread of electric vehicles and renewables, as well as grid upgrades, are driving demand growth that is likely to persist for the rest of the century,” Wood Mackenzie said. “The question is how the world can secure sufficient supply to meet this burgeoning demand.”
Copper demand is being propelled by a convergence of megatrends. Beyond energy transition and persistent demand from China, population growth, urbanisation, and industrial migration across Southeast Asia and India are set to create significant new demand over the coming decade.
Analysts said the potential impact of artificial intelligence, with the data centres required to power it poised to add “asymmetric additions to demand,” despite being a small driver today.
On the supply side, constraints extend beyond mining to refining, smelting, and semi-finished product manufacture, which remains dominated by China.
According to Wood Mackenzie, it will take 7.8 million tonnes (Mt) of new copper supply by 2035 to plug the emerging supply-demand gap. Recycling and scrap will help, but won’t be sufficient to plug the deficit.”
Trade tensions have added further complexity. Wood Mackenzie said the tariffs imposed by the US have not only raised domestic prices and caused a shift in global trade flows, but are deterring long-term copper investment.
Operational risks are also on the rise, with mine disruptions averaging 6 per cent over the past three years. To meet future demand, copper growth is shifting geographically, from Chile to the Democratic Republic of the Congo to Asia, with China, Russia, and other Asian countries dominating new mine supply.
Looking ahead, analysts said the market will remain shaped by power, politics and project ramp-up, leaving the copper industry facing both opportunity and significant risk as demand continues to climb.
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