Global power grid modernization and expansion, driven by the escalating demands of the digital and clean energy revolutions, are fueling a surge in copper demand that is outpacing industry projections. This unprecedented demand, coupled with constrained supply from major producers like Chile and the Democratic Republic of Congo due to insufficient investment in new mines, is setting the stage for a prolonged period of elevated copper prices.

Analysts anticipate copper prices could exceed $12,000 per metric ton before the end of the decade, representing a 23% increase from current levels around $9,700 per ton. Despite efforts by consumers to explore alternatives, copper's superior conductivity, durability, and versatility render it largely irreplaceable in critical applications. The International Energy Agency reports that grid investment alone is projected to surpass $400 billion this year, following a record $390 billion in 2024.

Michael Finch, head of strategic initiatives at Benchmark Mineral Intelligence (BMI), emphasized, "Copper is often a massively underestimated part of grid infrastructure. People recognise the need to expand the grid, but often misjudge the sheer volume of copper this will require," highlighting significant investment needs in the U.S., UK, and China. BMI forecasts global copper demand for power generation and transmission networks to climb to 14.87 million metric tons by 2030, up from 12.52 million tons this year.

Further exacerbating the supply challenge, Bank of America analyst Michael Widmer projects global copper demand to increase 10% to 30.32 million tons by 2030, leading to a global copper market deficit of 1.84 million tons in the same year. The rapid proliferation of data centers, essential for artificial intelligence and machine learning, is a significant driver. Peter Charland, Global Information and Communications Technology Leader at AECOM, noted that these advanced computing needs translate directly into higher power requirements. Consultancy CRU estimates copper demand from data centers will reach 260,000 tons this year, a substantial increase from 78,000 tons in 2020, and is expected to exceed 650,000 tons by 2030.

Electric vehicles also contribute substantially to this demand, requiring significantly more copper than conventional internal combustion engine vehicles. BMI forecasts EV-related copper demand to jump to 2.2 million tons by 2030, from 1.2 million tons in 2025 and just 204,000 tons in 2020. Maria Cristina Bifulco, Chief Investor Relations and Sustainability Officer at Prysmian, the world's largest copper buyer, stated, "We are moving from copper demand that was cyclical to demand that is more structural." While recycling offers some relief, with estimates suggesting secondary copper production will rise to 11 million tons by 2030 from 10 million tons this year, and fiber optic cables displacing copper in data transmission, these solutions are unlikely to bridge the looming supply crunch for critical infrastructure projects in the near term.