Quantum

JPMorgan

<p>Copper is becoming a binding constraint on the global buildout of AI infrastructure, electrification, and defense systems, according to an analysis by <strong>Katusa Research</strong>, which warns that demand is accelerating far faster than <a href="https://yellow.com/news/pwc-says-crypto-regulation-now-powers-financial-infrastructure">supply can respond.</a></p>
<p>Citing <strong>S&amp;P Global</strong>’s January 2026 copper outlook, Katusa Research said global copper demand is projected to rise from around 28 million metric tonnes today to 42 million tonnes by 2040.</p>
<p>Without major intervention, the firm estimates the market faces a potential shortfall of roughly 10 million tonnes, a gap it describes as structurally unmanageable under current supply timelines.</p>
<p>Copper prices touched a single-day record near $6 per pound this month, a move Katusa Research said reflects how little buffer remains in global inventories.</p>
<h2 id="ai-and-power-infrastructure-are-driving-demand">AI And Power Infrastructure Are Driving Demand</h2>
<p>Katusa Research points to AI-driven power consumption as a key accelerant.</p>
<p>According to S&amp;P Global data cited in the report, U.S. data centers accounted for about 5% of electricity demand when ChatGPT launched in late 2022. That share is expected to rise to 14% by 2030.</p>
<p>Each megawatt of AI data center capacity requires an estimated 30 to 47 tonnes of copper for wiring, cooling systems, and power distribution.</p>
<p>In China, where AI facilities are often built with double redundancy, copper intensity is even higher.</p>
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<p>JPMorgan estimates referenced in the analysis suggest AI data centers alone could add roughly 110,000 tonnes of incremental copper demand in 2026.</p>
<h2 id="electric-vehicles-and-defense-add-inelastic-pressure">Electric Vehicles And Defense Add Inelastic Pressure</h2>
<p>Electrification in transport is compounding the strain.</p>
<p>The report noted that battery electric vehicles use nearly three times as much copper as internal combustion vehicles, with global EV-related copper demand projected to rise from about 2.6 million tonnes today to 6.3 million tonnes annually by 2040.</p>
<p>Defense spending is adding another layer of inelastic demand.</p>
<p>NATO members have committed to materially higher military budgets, and modern weapons systems, communications infrastructure, and drones are copper-intensive, the firm said.</p>
<h2 id="supply-can-t-scale-fast-enough">Supply Can’t Scale Fast Enough</h2>
<p>On the supply side, the report highlighted falling ore grades, operational disruptions, and permitting delays.</p>
<p>S&amp;P Global data shows new copper mines take an average of 17 years from discovery to first production.</p>
<p><strong>UBS</strong> forecasts cited by the firm show copper deficits widening from about 230,000 tonnes in 2025 to more than 400,000 tonnes in 2026, with inventories already thin.</p>
<p>“The world needs 50% more copper,” Katusa Research said, “and the supply pipeline simply can’t respond in time.”</p>
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Copper Supply Gap Threatens AI Data Centers And Global Electrification Push

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