Copper demand is set to jump to 42 million metric tonne by 2040 from 28 million metric tonne in 2025, a 50% rise that could strain global supplies. That is the central finding of S&P Global’s January 2026 report, “Copper in the Age of AI: Challenges of Electrification.” The research house estimates that without significant supply expansion, the world could face a 10 million metric tonne shortfall by 2040.
S&P Global says the surge is being driven by four distinct demand engines: core economic activity, the energy transition, artificial intelligence and data centres, and defence modernisation. Together, these sectors are accelerating electricity use and, in turn, the need for copper as the primary conductor.
The 4 key sectors driving copper demand
1. Core economic demand remains the largest base
S&P Global projects that core economic demand, often referred to as “Dr. Copper,” will continue to form the backbone of consumption through 2040. This category includes construction, machinery, cooling systems, appliances, fossil power generation and internal combustion engine vehicles.
According to the report, core demand will rise to 23 million metric tonnes in 2040 from 18 million metric tonnes in 2025, growing at about 2% annually. Construction and machinery remain the biggest contributors within this segment.
Copper use in construction alone is forecast to increase to 9.7 million metric tonnes in 2040 from 7.5 million metric tonnes in 2025. Asia, including China, is expected to account for roughly 60% of construction-related copper consumption by 2040.
Cooling and appliances are also expanding rapidly. S&P Global notes that the number of air conditioning units globally is expected to rise to over 4.5 billion by 2040 from 2.5 billion in 2025. Cooling-related copper demand is projected to grow at 3.4% annually, while appliances such as refrigerators, washing machines and televisions will continue adding to overall consumption.
While copper use in internal combustion engine vehicles is expected to decline to 0.6 million metric tonnes by 2040 from 1.3 million metric tonnes in 2025 on account of rising EV adoption, this drop is more than offset by other end uses.
2. Energy transition and addition: The fastest-growing block
The energy transition and addition segment is forecast to be the largest contributor to incremental demand between 2025 and 2040. S&P Global estimates that copper demand from this segment will rise to 15.6 million metric tonne in 2040 from 8.5 million metric tonne in 2025, an annual growth rate of 4.1%.
This translates into an additional 7.1 million metric tons of annual demand by 2040.
The firm includes electric vehicles, battery storage, renewable power generation such as solar and wind, and transmission and distribution infrastructure in this category.
Global electricity demand itself is projected to grow by nearly 50% by 2040 compared with 2025 levels. To meet this requirement, over 21,000 gigawatts of power generating capacity are expected to be operational by 2040, producing 48 petawatt-hours of electricity.
Transmission and distribution networks are a major copper-intensive component of this build-out. Typical underground transmission lines use around 19,500 kg of copper per kilometre, while distribution cables use about 3,700 kg per kilometre.
Electric vehicles also add significantly to copper intensity. As noted in the report, EVs require 2.9 times more copper than conventional cars. In 2025, 22 million EVs were sold globally, compared to just about 10,000 in 2010.
3. AI and data centres: The new demand engine
S&P Global identifies artificial intelligence and data centres as a relatively new but rapidly expanding source of copper demand.
The report estimates that AI and data centres will contribute an additional 2 million metric tons of copper demand between 2025 and 2040 for IT infrastructure and associated power requirements.
Data centres are highly electricity-intensive. In the United States, their share of total electricity demand is projected to rise to as much as 14% by 2030 from 5% today.
This growth requires not only direct copper use inside facilities for power delivery, cooling and IT equipment, but also major expansion in the grid infrastructure that supports them. S&P Global says that the acceleration of AI investment has added a new layer of pressure on electricity systems, which directly translates into higher copper needs.
4. Defence modernisation adds strategic demand
Defence is the fourth major driver identified in the report. Rising geopolitical tensions and increased military spending are contributing to higher copper use in electrified equipment, communications systems and advanced weapons.
S&P Global projects that defence-driven copper demand could triple by 2040. The report notes that NATO members have pledged to increase defence spending to 5% of GDP, reinforcing the long-term nature of this demand.
Modern weaponry, surveillance systems and communications infrastructure are increasingly dependent on high-conductivity materials, making copper central to these investments.
Conclusion
S&P Global’s analysis concludes that global copper demand will rise by 14 million metric tonne between 2025 and 2040, taking total consumption to 42 million metric tonne. Core economic activity and the energy transition remain the largest pillars, while AI, data centres and defence add new and fast-growing layers of demand.
At the same time, the S&P Global highlighted that without meaningful expansion in mined supply, recycling and processing capacity, the market could face a 10 million metric tonne gap by 2040.