Copper market faces supply crunch as demand rises across AI, defence and energy

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23.10.2026

Copper market faces supply crunch as demand rises across AI, defence and energy — Copper faces critical shortage

Rising demand for copper is increasing pressure on a metal that underpins power networks, data infrastructure and advanced manufacturing. A widening supply gap could begin as early as 2028, raising costs for the green transition, artificial intelligence and defence technology.

Highlights

Copper supply is projected to fall short of demand by 8% in 2035 and 44% by 2050, with market imbalance possible as early as 2028 according to BloombergNEF.
Bringing new copper mines online can take up to 15 years, while ore quality declines and geopolitical risks hinder expansion in key resource regions.
Copper prices hit a record $14,875 per tonne on the London Metal Exchange in May 2024, up 76% since early 2024, signaling rising cost pressures across global industries.

Supply gap outlook and mining constraints

As reported by Financial Times, citing BloombergNEF, the copper market is heading toward a long-term shortage, with supply projected to fall short of demand by 8% in 2035 and 44% by 2050. The report indicates that the imbalance may start as soon as 2028, as consumption accelerates faster than new output can be developed.

One of the main constraints is the long timeline for bringing new mines into operation. Discovering deposits, securing permits and building projects can take up to 15 years, while many existing mines are contending with declining ore quality and limited scope for major production increases.

The sector is also becoming more cautious about risk, with operators often choosing to improve current assets instead of backing large new mining developments. Some of the richest untapped copper resources are in politically unstable regions, adding geopolitical uncertainty to future supply plans.

Cost pressure for industry and the global economy

Copper prices are already climbing as the market tightens. On the London Metal Exchange, the metal reached a record $14,875 per tonne last month, up 76% since early 2024.

If the projected shortage materializes, higher copper costs are likely to affect companies across technology, energy and industrial supply chains. That could slow parts of the energy transition, raise input costs for AI-related infrastructure and defence systems, and add pressure to economic growth in developing countries that are especially exposed to commodity and infrastructure bottlenecks.

Our earlier coverage looked at how escalating geopolitical tensions and repeated trade disruptions are prompting companies to redesign supply chains and shipping routes for greater resilience, even at higher cost. It also noted the WTO’s view that some of these changes could persist beyond current conflicts, as businesses and governments try to reduce exposure to future shocks and a more fragmented trade environment.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.

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