According to analysis by Katusa Research, copper is becoming a key constraint in the expansion of global AI infrastructure, electrification, and defense systems, warning that demand is accelerating much faster than supply can respond.
Katusa Research cited S&P Global's copper forecast from January 2026, stating that global copper demand is expected to increase from the current annual level of about 28 million tons to 42 million tons by 2040.
The report estimates that without significant intervention, the market could face a potential shortfall of about 10 million tons, which is structurally difficult to manage with the current supply schedule.
Copper prices have recorded a single daily high approaching $6 per pound this month, reflecting that there is almost no buffer left in global inventories, according to Katusa Research.
AI and power infrastructure are driving demand.
Katusa Research identifies AI-driven electricity consumption as a key acceleration factor.
According to S&P Global data cited in the report, U.S. data centers accounted for about 5% of electricity demand at the end of 2022, when ChatGPT was launched, and this share is expected to rise to 14% by 2030.
It is estimated that approximately 30 to 47 tons of copper are needed for wiring, cooling systems, and power distribution per 1 megawatt (MW) of AI data center capacity.
In China, where AI facilities are often built with redundancy structures, the intensity of copper use is even higher.
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According to estimates from JPMorgan cited in the analysis, additional copper demand of about 110,000 tons could arise from AI data centers alone by 2026.
The electric vehicle and defense industries add inelastic pressure.
The electrification of the transportation sector is further exacerbating this burden.
The report stated that battery electric vehicles (BEVs) use nearly three times as much copper as internal combustion engine vehicles, and global copper demand related to EVs is expected to increase from about 2.6 million tons annually now to 6.3 million tons by 2040.
Increased defense spending is acting as another layer of inelastic demand.
NATO member countries have decided to substantially increase military budgets, and the company noted that modern weapon systems, communication infrastructure, and drones all have a high proportion of copper usage.
Supply cannot expand quickly enough.
From the supply side, the report identified declining ore grades, operational disruptions, and permitting delays as key constraints.
According to S&P Global data, it takes an average of 17 years from discovery to first production for new copper mines.
According to forecasts cited by the company from UBS, the scale of copper supply shortages is expected to exceed 230,000 tons in 2025 and 400,000 tons in 2026, with inventories already at thin levels.
Katusa Research pointed out that 'the world needs 50% more copper, but the supply pipeline is unable to respond in time.'
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