Copper prices hit records amid forecasts of a shortage by 2040 — MarketWatch
Copper futures on the COMEX exchange reached a record $6.87 per pound this week, approximately 19% higher than at the start of the year. On the London Metal Exchange, the price rose to a record $14,800 per metric ton. As MarketWatch reports, the U.S. price was equivalent to about $15,141 per ton, reflecting the premium U.S. buyers are willing to pay as they stockpile supplies ahead of the possible introduction of import tariffs by President Donald Trump.
Demand from electrification and AI
Oroco Resource Corp CEO Charlie Kraier believes that electrification and the development of artificial intelligence infrastructure are long-term drivers of copper demand. According to him, data centers being built by major U.S. technology companies, including Amazon, Alphabet, SpaceX and Meta, require significant volumes of the metal primarily for electricity distribution.
Oroco Resource, headquartered in Vancouver, owns the Santo Tomas copper asset in northwestern Mexico. The company expects to begin production there in 2032. The resource contains about 1 billion tons of copper ore, and its projected operating life is 20 years. Following a preliminary economic assessment conducted in 2024, Oroco plans to publish a preliminary feasibility study in 2027.
Supply may not keep up with demand
Kraier also pointed to declining copper grades in ore, a lack of major new discoveries and reduced capital expenditures in the industry. In his assessment, bringing a new mine online can take from 15 to 20 years, while higher interest rates complicate financing for large-scale projects.
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He also cited a shortage of sulfuric acid, which is required for the operation of some copper mines. According to data cited in the article, about 50% of global sulfur supplies pass through the Strait of Hormuz to global markets.
The International Energy Agency forecasts that global copper demand could reach 42 million tons per year by 2040. A Bernstein Private Wealth Management report published in July estimates the potential shortage at up to 12 million tons. S&P Global, in turn, forecasts a 24% gap between demand and supply by 2040, which could become significant after 2035.
At the same time, Kraier warned that the U.S. abandoning tariffs, the restoration of peace in the Middle East, or a sharp cooling of interest in AI could trigger a noticeable decline in prices. Oroco currently uses a long-term copper price of $4 per pound in its financial models.
