Copper Shortage Looms: Demand to Outstrip Supply by 30%

Global copper demand is set to surge, leading the International Energy Agency (IEA) to forecast a substantial deficit by 2035. This shortage could reach up to 30 percent if mining operations do not accelerate significantly, driven primarily by the needs of the energy transition and advancements in artificial intelligence. Current market dynamics and production challenges present significant hurdles.

Several factors contribute to the difficulty in expanding copper output, including lower ore grades, increasing capital expenditures, and extended project development periods. These issues make it harder to boost supply compared to other critical minerals. Concurrently, the International Copper Study Group anticipates a refined copper market deficit in 2026, revising previous surplus predictions due to slower production growth.

Amidst these supply concerns, China's substantial share of global refined copper production, exceeding 50 percent, raises worries about supply chain security for other nations. While China's smelting capacity expands, new copper-producing nations are expected to emerge, potentially altering the market landscape and challenging existing dominance.