'Substantial Shortfall' in Copper Supply Widens as the Race for AI and Growing Defense Spending Add to Accelerating Demand, New S&P Global Study Finds

Rhea-AI Summary

S&P Global (NYSE: SPGI) study dated Jan 8, 2026 projects global copper demand will reach 42 million metric tons by 2040, a 50% increase from current levels, while primary production is forecast to peak at 33 million metric tons in 2030. The report warns of a 10 million metric ton supply deficit by 2040 if investment and permitting do not accelerate, noting recycled scrap may double to 10 million metric tons and data center, AI and defense demand could add about 4 million metric tons.

Positive

• Projected copper demand of 42 Mt by 2040
• Recycled copper expected to rise to 10 Mt by 2040
• Data center and defense demand could add 4 Mt

Negative

• Forecast supply deficit of 10 Mt by 2040
• Primary production may peak at 33 Mt in 2030
• Average 17 years from discovery to mine production

Key Figures

Copper demand 2040 42 million metric tons Projected global copper demand by 2040 (50% above current)

Supply deficit 2040 10 million metric tons Projected copper supply shortfall in 2040 (25% below demand)

Production peak 33 million metric tons Projected peak global copper production in 2030

Recycled copper 2040 10 million metric tons Recycled scrap rising from 4M metric tons today to 10M by 2040

Data center capacity 550 gigawatts Expected total installed data center capacity by 2040 (>5x 2022)

Defense spending 2040 $6 trillion Potential global defense spending by 2040

Extra primary supply 10 million metric tons Additional mined copper required by 2040 on top of recycling

New mine timeline 17 years Average time from copper discovery to production

Market Reality Check

$541.94 Last Close

Volume Volume 1,171,928 vs 20-day average 1,537,215 (relative volume 0.76). normal

Technical Price $537.50, trading above 200-day MA at $510.23 while 7.2% below 52-week high.

Peers on Argus

SPGI slipped 0.4% with key peers also lower: MCO -0.72%, ICE -2.45%, CME -0.7%, MSCI -1.44%, NDAQ -0.3%. Momentum scanner did not flag a coordinated sector move.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 30	Housing index data	Neutral	-0.5%	Case-Shiller October 2025 home-price indices showed modest year-over-year gains.
Dec 18	Buybacks analysis	Positive	-0.8%	Report showed S&P 500 Q3 2025 buybacks rebounding to <b>$249.0B</b> and record 12‑month totals.
Dec 17	AI philanthropy	Positive	+2.1%	Launch of StepForward, a <b>$10M</b> multi‑year initiative for AI workforce readiness.
Dec 16	Fraud alert report	Negative	+0.1%	CARFAX highlighted a <b>14%</b> jump to <b>2.45M</b> vehicles with suspected odometer rollbacks.
Dec 16	Board appointment	Positive	+0.1%	Appointment of Hubert Joly to SPGI’s board and key committees from <b>Jan 2, 2026</b>.

Pattern Detected

Recent SPGI news has generally produced modest single-day moves, with several instances where positive or strategic announcements coincided with small share price declines.

Recent Company History

Over the past few months, SPGI has issued a mix of index data, market structure insights and corporate updates. Recent items include October 2025 Case‑Shiller home‑price results, a report on S&P 500 buybacks reaching $249.0 billion in Q3 2025, a CARFAX alert on rising odometer fraud, and the addition of Hubert Joly to the Board effective Jan 2, 2026. The new copper–AI study fits SPGI’s pattern of publishing thematic research on structural market and infrastructure trends.

Market Pulse Summary

This announcement underscores SPGI’s use of proprietary data to map how AI, electrification and defense reshape copper demand, projecting a 10 million metric ton supply deficit by 2040. It builds on prior AI-focused research and positions the company as a reference source on infrastructure bottlenecks. Investors may watch for how such thematic work feeds into SPGI benchmarks, analytics offerings, and client demand for energy-transition and AI-related insights.

Key Terms

gigawatts technical

"over 650 one-gigawatt nuclear reactors, each year between now and then."

A gigawatt is a unit of power equal to one billion watts, used to measure how much electricity a plant or project can produce at any moment. For investors, it’s a quick way to compare scale — like comparing the horsepower of engines — and shows how large a power asset or renewable portfolio is, which affects potential revenue, grid influence, and the size of required investment.

megawatt technical

"Every new building, every line of digital code, every renewable megawatt, every new car,"

A megawatt is a unit of power equal to one million watts, used to describe how much electricity something can produce or use at a given instant. Think of it like the flow rate of water from a firehose: it tells you how fast energy is being delivered, not how much has been used over time. For investors, megawatts signal the scale of power plants, solar or wind projects and industrial demand, which affects revenue potential, capital cost and project valuation.

ore grades technical

"ranging from declining ore grades; rising costs for energy, labor and other inputs;"

Ore grade is the concentration of a valuable metal or mineral in mined rock, usually expressed as a percentage or as grams per tonne. Higher grades mean more of the sought material in each ton of rock, like fruit with more juice that yields more product with less work. Investors watch ore grades because they strongly affect how much metal can be produced, the cost of extraction, the likely lifespan of a mine and the project’s profitability and risk.

smelting capacity technical

"a single country—China—commanding roughly 40% of total smelting capacity and 66%"

Smelting capacity is the maximum amount of raw metal ore a smelter can process into usable metal over a given time, usually measured in tonnes per year. For investors it matters because capacity determines how much metal can be brought to market, influences revenue potential and production costs, and creates supply bottlenecks or surpluses; think of it like a factory’s throughput that sets how much product a company can sell.

copper concentrate technical

"66% of the imports of the main input, mined copper concentrate."

A copper concentrate is a semi-finished product created by crushing and processing mined ore to concentrate the copper-bearing minerals into a dense powder or slurry that is sold to metal refineries for smelting and refining. Think of it as a concentrated raw material — like tomato paste vs whole tomatoes — where the amount and purity of copper determine how much refined metal and revenue a mine will ultimately produce, so changes in concentrate grade, production or processing costs directly affect investor returns.

AI-generated analysis. Not financial advice.

Supply deficit would reach 10 million metric tons by 2040 as demand surges 50%

WASHINGTON, Jan. 8, 2026 /PRNewswire/ -- A looming copper supply gap is poised to widen as electricity demand accelerates and new vectors—such as the race for artificial intelligence and surging defense spending—add to the call on copper. According to Copper in the Age of AI: The Challenges of Electrification, a comprehensive new study by S&P Global (NYSE: SPGI), the emerging supply deficit constitutes a "systemic risk for global industries, technological advancement and economic growth."

The study finds that the "accelerating pace of electrification" is projected to swell copper demand to 42 million metric tons by 2040, a 50% increase from current levels. Yet, existing supply is currently poised to decrease in coming years as the mining sector faces challenges across the copper value chain.

The study projects that global copper production will peak in 2030 at 33 million metric tons. Unless significant adjustments are made, the widening disconnect will result in a supply deficit of 10 million metric tons by 2040—25% below projected demand.

This "substantial shortfall" occurs despite what the study expects will be a more than doubling of recycled copper scrap, from 4 million metric tons today to 10 million metric tons by 2040.

"Here, in short, is the quandary: copper is the great enabler of electrification, but the accelerating pace of electrification is an increasing challenge for copper," said Daniel Yergin, Vice Chairman, S&P Global who co-chaired the study. "Economic demand, grid expansion, renewable generation, AI computation, digital industries, electric vehicles and defense are scaling all at once—and supply is not on track to keep pace. At stake is whether copper remains an enabler of progress or becomes a bottleneck to growth and innovation."

The study leverages S&P Global expertise and proprietary data across the company's Energy and Market Intelligence divisions. Projections are based on a detailed bottom-up, technology-by-technology approach to quantify demand at its point of consumption, as opposed to production. This enables a better estimate of the embedded demand for the metal and the potential shortages or surpluses countries could face due to disruptions across the supply chain.

"Several countries have deemed copper a 'critical metal' over the past half decade, including, in 2025, the United States. And with good reason," said Carlos Pascual, Senior Vice President, Geopolitics and International Affairs, S&P Global Energy and study co-chair. "Copper is the connective artery linking physical machinery, digital intelligence, mobility, infrastructure, communication and security systems; the future availability of copper has become a matter of strategic importance."

The Future of Copper Demand

S&P Global Energy projects global electricity demand will increase by almost 50% by 2040. Meeting this demand will require adding the equivalent of roughly 330 Hoover Dams, or over 650 one-gigawatt nuclear reactors, each year between now and then.

The new study finds demand for copper—as the enabling material for this massive growth in power demand—accelerating across four key vectors, two of which are:

• Core economic demand—from construction, electric appliances, internal combustion engine vehicles, rail, shipping, aviation, power generation, and more—constitutes the largest overall share of demand, reaching 23 million metric tons (53% of global demand) by 2040.
  
  
• Energy transition and addition demand—from electric vehicles, battery storage, renewable power capacity and power transmission and distribution, as well as electrification in developing countries—commands the largest amount of total growth, increasing by more than 7 million metric tons to a total of 15.7 million metric tons over the same period.

Demand from just these two categories will exceed copper supply by more than 7 million metric tons in 2040, the study finds. The gap widens further when you consider additional areas that have emerged in just the past few years, namely the rapid growth in AI and data centers and rising defense spending.

S&P Global expects total installed capacity for all data centers to be roughly 550 gigawatts by 2040—more than 5 times what it was in 2022. At the same time, global defense spending could double to $6 trillion by 2040 amid increased international tensions and the emergence of new threats, the study says.

• AI & Data Center demand and Defense demand—these two emerging vectors are each expected to roughly triple by 2040, representing a combined 4 million metric tons of additional demand.

The study also identifies a potential fifth vector of demand—humanoid robots. While the technology remains in the early stages, some project that there could be 1 billion to 10 billion humanoid robots in operation by 2040. One billion humanoid robots in operation by 2040 would mean about 1.6 million metric tons of copper required annually, or 6% of current copper demand, the study says.

Closing the Supply Gap

Overcoming the impending supply shortfall will ultimately depend on the development of new mines and the expansion of existing assets. The study estimates that an additional 10 million metric tons of this "primary supply" will be required by 2040, on top of increased recycling. However, absent significant investment, global primary supply could produce just 22 million metric tons by 2040—1 million metric tons less than today.

Reversing the current supply trajectory will be no small task, the study says. The copper sector faces a host of challenges above and below ground, ranging from declining ore grades; rising costs for energy, labor and other inputs; increasingly complex and difficult extraction conditions; environmental opposition, lengthy judicial reviews, and pressures from investors and governments. It takes 17 years, on average, for a new copper mine to go from discovery to production.

"Primary production—mining—remains the irreplaceable foundation of copper supply," said Eleonor Kramarz, Global Head of Critical Minerals and Energy Transition Consulting, S&P Global Energy. "Bridging the impending supply gap depends not only on geology, engineering, and logistics and investment, but also on governance and policies. That translates into timeliness in permitting and consultation, a time clock on litigation and stability in governance and regulation. The alternative is uncertainty, and uncertainty comes at a hefty cost."

Concentration of the supply chain presents another challenge, the study finds. Six countries are responsible for roughly two-thirds of mining production. Processing capacity is even more concentrated, with a single country—China—commanding roughly 40% of total smelting capacity and 66% of the imports of the main input, mined copper concentrate. Such concentration makes global supply and pricing vulnerable to disruptions, policy shocks and complex trade barriers, the study says.

"The future is not just copper-intensive, it is copper-enabled. Every new building, every line of digital code, every renewable megawatt, every new car, every advanced weapon system depends on the metal," said Aurian De La Noue, Executive Director, Critical Minerals and Energy Transition Consulting, S&P Global Energy. "Multilateral cooperation and regional diversification will be crucial to ensure a more resilient global copper system—one commensurate with copper's role as the linchpin of electrification, digitalization and security in the age of AI."

About the Study:

Copper in the Age of AI: The Challenges of Electrification is available at https://www.spglobal.com/en/research-insights/special-reports/copper-in-the-age-of-ai

The study analyzes the global outlook for copper supply and demand through 2040, focusing on copper's essential role in electrification, digitalization, and emerging technologies such as AI, data centers, electric vehicles, and defense. Leveraging S&P Global's cross-divisional expertise and proprietary data across the company's Energy and Market Intelligence divisions, the report uses a bottom-up, sector-by-sector approach to quantify future copper requirements and assess the ability of mining, recycling and processing to meet projected demand.

The study examines the operational, regulatory and market challenges facing copper supply chains, including above-ground risks, permitting delays, trade dynamics and talent shortages. It benchmarks the scale of the potential supply shortfall and highlights the factors that could constrain or enable future growth.

This report does not make policy recommendations. It is intended to inform and support dialogue on the challenges and opportunities shaping copper's role in the global energy transition and digital economy.

The analysis and metrics developed during the course of this research represent the independent analysis and views of S&P Global.

This study was supported by the following organizations: Anglo American plc; Barrick Mining Corporation; BHP Ltd; Freeport-McMoRan Inc; Google LLC; Gunvor Group; Lundin Mining Company; Northern Dynasty Minerals Ltd.' Resolution Copper; Rio Tinto Corporation; Saudi Arabian Mining Company (MAADEN); Taseko Mines Limited; Trafigura Group Pte Ltd; and Vale Base Metals and Vale SA.

S&P Global is exclusively responsible for the analysis, content and conclusions of the study.

Media Contacts:

Jeff Marn
S&P Global Energy
+1 202 463 8213
jeff.marn@spglobal.com

Orla O'Brien
S&P Global
+1 857 407 8559
orla.obrien@spglobal.com

About S&P Global

S&P Global (NYSE: SPGI) enables businesses, governments, and individuals with trusted data, expertise and technology to make decisions with conviction. We are Advancing Essential Intelligence through world-leading benchmarks, data, and insights that customers need in order to plan confidently, act decisively, and thrive economically in a rapidly changing global landscape.

From helping our customers assess new investments across the capital and commodities markets to guiding them through the energy expansion, acceleration of artificial intelligence, and evolution of public and private markets, we enable the world's leading organizations to unlock opportunities, solve challenges, and plan for tomorrow – today. Learn more at www.spglobal.com.

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SOURCE S&P Global

FAQ

What did S&P Global (SPGI) say about copper demand by 2040 on Jan 8, 2026?

The study projects copper demand of 42 million metric tons by 2040, a 50% increase from today.

How large is the projected copper supply shortfall in the SPGI 2026 study?

The report forecasts a 10 million metric ton gap between demand and supply by 2040 absent major changes.

What role do AI and data centers play in SPGI's copper outlook (SPGI)?

AI and data center growth are expected to roughly triple and contribute about 4 million metric tons of demand by 2040.

Can recycling close the copper gap according to the SPGI study?

Recycled copper is expected to increase from 4 Mt to 10 Mt by 2040, which helps but does not fully close the deficit.

What supply-side constraints did S&P Global highlight in the Jan 8, 2026 study?

Key constraints include declining ore grades, rising costs, long permitting timelines, and concentrated processing capacity.

How long does S&P Global say it takes to bring a new copper mine online?

The study states it takes an average of 17 years from discovery to production.