Beyond the crude oil crisis, copper shortages are also looming! S&P: The global gap may reach 10 million tons by 2040.

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The copper market supply crisis is accelerating under multiple pressures. Mining accidents and tariff disturbances continue to squeeze supply in the short term. At the same time, the electrification wave and explosive demand from artificial intelligence infrastructure are pushing copper toward a deeper structural shortage.

According to a research report published by S&P Global in January this year, the global copper supply gap is expected to widen to 10 million tons by 2040, when demand will rise to 42 million tons, surging 50% from current levels. More urgently, ING predicts that the refined copper shortage will reach 600,000 tons in 2026, continuing the trend of a 200,000-ton supply gap in 2025.

Tightening supply has left a clear imprint on prices. In 2025, the near-month contract for copper futures on the New York Commodity Exchange (COMEX) rose more than 41% for the year, marking the largest annual increase since 2009—when that contract surged by 138%. So far this year, copper prices have continued to rise by nearly 2%.

Copper is known as the "barometer" of the global economy, and is widely used in power grids, renewable energy systems, and electric vehicles. Meanwhile, the booming artificial intelligence industry brings a new engine of demand—data centers, in their construction and operation, rely on copper across all aspects including power systems, cooling equipment, and network devices.

Frequent mining accidents, supply shocks will last for years

Numerous commodity experts point out that disruptions in mining production are the core reason for the copper supply shortages in 2025, and their domino effects will continue to be felt for years to come.

Charles Cooper, head of copper research at Wood Mackenzie, told CNBC: “Last year, the industry faced numerous major challenges… all three of the world’s largest copper mines were shut down for a period of time.”

Specifically, the Kamoa Kakula mine in the Democratic Republic of Congo—one of the world’s top copper mines—suffered severe flooding in the first half of 2025, leading to lower production forecasts for 2026 and 2027. At El Teniente, the world’s largest underground copper mine owned by Chile’s Codelco, a deadly tunnel collapse occurred in June of last year; recently, the mine’s general manager Claudio Sougarret stated the accident will continue to pressure output for the next five years. Indonesia’s Grasberg mine saw a fatal landslide in September last year, resulting in a 35% downward revision of 2026 production forecasts, with operations expected to only return to normal at the earliest in 2027.

Charles Cooper noted, according to Wood Mackenzie’s calculations, the mining industry’s average annual disruption rate is about 5%, but last year’s actual level was significantly higher than normal. This means a large share of new copper capacity, which was expected to fill supply gaps, has been greatly reduced and "deferred to future years."

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

Tariff disruptions create "man-made tensions", uncertainty keeps pushing up the risk premium

Another layer of supply pressure comes from market distortions caused by tariff policies. Concerns about broader tariffs have triggered large-scale stockpiling in the US market.

ING commodities strategist Ewa Manthey told CNBC:

“You’ll see massive amounts of copper material piling up in US warehouses, but this means supply outside the US is becoming extremely tight, and the market has almost no cushion to absorb supply shocks. This is a man-made tightness, because a large amount of inventory is being held up domestically in the US, while markets outside the US face severe shortages.”

Although the US Supreme Court overturned much of Trump’s broad tariff policies in March this year, special tariffs on the metals industry remain in force. Manthey believes that persistent policy uncertainty will maintain a certain "risk premium" for copper prices. She added:

“Materials that have already flowed into the US are unlikely to be released back to the global market, because industry-specific tariffs are still being enforced, and the direction of trade policy remains difficult to predict.”

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