BloombergNEF: Global copper shortage may begin in 2028, supply-demand gap could reach 44% by 2050

The global copper market is facing an increasingly severe structural supply-demand imbalance. The green energy transition, AI infrastructure expansion, and infrastructure in emerging markets are jointly driving up demand, but long mine development cycles, declining ore grades, and insufficient investment make it difficult for supply to keep up. The copper shortage may not only push prices higher over the long term, but may also raise the cost of the energy transition and constrain the development of related industries.

According to a report released this week by BloombergNEF, the global copper market will enter a "large-scale long-term shortage" starting in 2028, with the supply gap projected to reach 8% of demand by 2035 and further widen to 44% by 2050. The International Energy Agency had previously issued a similar warning.

Copper prices have already reflected expectations of tightening supply and demand in advance. The London Metal Exchange copper price hit a record high of $14,875 per ton last month, up 76% cumulatively from the start of 2024. The Trump administration's potential copper tariff policy has prompted U.S. buyers to stock up and hoard copper in advance, and the Strait of Hormuz crisis has tightened the supply of sulfur needed for copper smelting, further pushing up prices. If the structural shortage continues to intensify, copper prices may face greater long-term upward pressure.

Copper has excellent electrical conductivity and is an important raw material for the low-carbon energy system, widely used in solar power generation, electric vehicles, and related power infrastructure. At the same time, the rapid expansion of AI data centers is also increasing copper demand, from internal equipment such as servers to the power supply facilities needed to maintain operations, all of which depend on copper.

In addition, geopolitical turmoil is driving countries to increase procurement of high-tech military equipment, and high-growth developing countries are continuing to advance infrastructure construction, providing additional support for copper demand. BloombergNEF regards these trends as several major "super trends" in the global economy and warns that insufficient copper supply may become a common bottleneck constraining their development.

On the supply side, however, it is difficult to respond quickly to demand growth. Teck CEO Jonathan Price predicted last week at the Financial Times Metals and Mining Summit in the UK that the copper supply gap could reach about 30% by 2035.

Mine development cycles last as long as 15 years, and the energy transition may bear a greater impact

The core difficulty of copper supply is that new capacity is difficult to release quickly. Price pointed out that building a data center may take only six months, but discovering, approving, and building a new mine may take 15 years. At the same time, many old mines that have operated for decades face continuously declining ore grades; it is already not easy for mining companies to maintain existing output, and new mine projects are relatively limited.

According to analysis by Wood Mackenzie analysts, changes in institutional investors' risk appetite over the past two decades have also exacerbated supply constraints. Investors are more inclined to require mining companies to improve the operating efficiency of existing mines or expand scale through mergers and acquisitions, rather than investing funds to develop riskier, longer-cycle new mines. Some large undeveloped copper mines are located in countries with higher political risk, further weakening Western mining companies' willingness to invest.

For mining companies, tight supply means a more favorable long-term pricing environment. Price also said that the copper market is ushering in a "very favorable long-term market outlook." But for downstream industries, a sustained shortage means higher raw material costs and some demand going unmet.

AI data center operators with strong financial resources may be able to withstand higher procurement costs, while for developing countries with relatively limited funds, rising copper prices may significantly increase the costs of grid construction, renewable energy projects, and electrification upgrades, and may even slow the green transition process. The impact of the copper shortage therefore goes beyond the metals market itself and may further transmit to global energy transition and infrastructure investment. Risk disclosure and disclaimer

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