Beyond the oil crisis, copper shortages are also imminent! S&P: Global deficit may reach 10 million tons by 2040

The copper market supply crisis is accelerating under multiple pressures. Mine accidents and tariff disruptions continue to compress supply in the short term, while the wave of electrification and explosive demand for AI infrastructure are pushing copper into a deeper structural shortage.

According to a research report released by S&P Global in January this year, the global copper supply gap is expected to widen to 10 million tons by 2040, with demand rising to 42 million tons—an increase of 50% from current levels. More urgently, ING predicts that refined copper shortages will reach 600,000 tons in 2026, continuing the supply gap trend of 200,000 tons in 2025.

Supply tightening has already left a clear mark on prices. In 2025, the nearby COMEX copper futures contracts rose over 41% for the year, marking the largest annual increase since 2009—when the contract surged 138%. So far this year, copper prices have continued to rise by nearly 2%.

Copper is known as a “barometer” of the global economy, widely used in power grids, renewable energy systems, and electric vehicles. Meanwhile, the booming AI industry is creating new demand drivers—data centers rely heavily on copper for power systems, cooling devices, and network equipment during construction and operation.

Frequent mine accidents cause supply shocks that impact for years

Several commodities experts point out that mine production disruptions are the core reason for copper shortages in 2025, and their ripple effects will continue for years to come.

Charles Cooper, head of copper research at Wood Mackenzie, told CNBC: “Last year, the industry faced many major challenges… All three of the world’s largest copper mines experienced periods of shutdown.”

Specifically, the Kamoa Kakula mine in the Republic of Congo—one of the top copper mines globally—suffered severe flooding in the first half of 2025, leading to downward revisions of production forecasts for 2026 and 2027. The El Teniente mine, Chile’s largest underground copper mine operated by Codelco, experienced a fatal tunnel collapse last June. Its general manager, Claudio Sougarret, recently stated that the incident will keep production under pressure for the next five years. The Grasberg mine in Indonesia also experienced a fatal mudslide last September, resulting in a 35% reduction in 2026 production forecasts, with operations expected to resume normalcy as early as 2027.

Cooper noted that Wood Mackenzie estimates the industry’s annual mine disruption rate at about 5%, but actual disruptions last year were significantly higher than normal. This means that large amounts of new copper capacity expected to fill supply gaps have been sharply reduced and “delayed to future years.”

Meanwhile, the cycle for new mines is long—according to S&P Global, it takes an average of 17 years from discovery to production for a copper mine, further limiting supply-side flexibility.

Tariff disruptions create “artificial tension,” and ongoing uncertainty continues to elevate risk premiums

Another pressure on supply comes from market distortions caused by tariff policies. Concerns over broader tariffs have triggered large stockpiling in the U.S. market.

Ewa Manthey, commodities strategist at ING, told CNBC:

“You see a large accumulation of copper materials in U.S. warehouses, but this means that outside the U.S., supply has become extremely tight, and the market has little capacity to absorb shocks. It’s an artificially created tension because the U.S. has accumulated large inventories domestically, while markets outside are severely undersupplied.”

Although the U.S. Supreme Court overturned most of Trump’s broad tariffs in March this year, targeted tariffs on the metals industry remain in effect. Manthey believes that the continued policy uncertainty will maintain a certain ‘risk premium’ on copper prices. She added:

“Materials already flowing into the U.S. are unlikely to be released back into the global market, as industry-specific tariffs are still in place, and the direction of trade policies remains unpredictable.”