Global economy faces 'systemic risk' from copper shortage - S&P

The world is heading toward a copper shortage that will pose a "systemic risk" to global economic growth, S&P Global said. One of the largest providers of financial and analytical information predicts that copper production will start to decline from 2030, while consumption will continue to grow, regardless of the green agenda.

The looming copper deficit will reach 10 million tons by 2040 - equivalent to nearly a third of current global demand - in the absence of "meaningful supply expansion," S&P Global said in a report released Jan. 8. This poses a "systemic risk to global industries, technological progress and economic growth," the company warned.

If current trends continue, global copper production will peak in 2030, after which it will begin to decline, S&P said. At the same time, the company expects "transformational" growth in global demand for copper from 28 million tons in 2025 to 42 million tons in 2040. This growth will be driven by four key factors: underlying economic demand, the green energy transition, the development of AI and data centers, and defense modernization, the company said. "At stake is whether copper will remain a driver of progress or become a bottleneck for growth and innovation," Daniel Yergin, co-principal investigator and vice chairman of S&P Global, told the Financial Times.

S&P published a similar report in 2022, linking copper demand to efforts to achieve carbon neutrality in the world by 2050. The report released on January 8 uses a different methodology and forecasts demand based on a baseline scenario that assumes copper consumption growth regardless of government climate policies, S&P explained to Reuters.

Copper futures fell to $5.8 per pound on January 8, retreating from historic highs following a broad correction in the metals sector amid profit-taking by investors, Trading Economics reported. Earlier this week, copper prices soared to a record $13,000 per ton due to growing fears that the administration of President Donald Trump may impose new duties on metals, provoking the diversion of supplies to the U.S. and limiting supply in major trading hubs such as London and Shanghai. Prices were also supported by a strong outlook for global demand, driven in particular by the modernization of energy grids, investment in renewable energy and the expansion of data center infrastructure, the analytical service stated.

This article was AI-translated and verified by a human editor