The Future of Copper: BHP Predicts Massive Demand Surge Through 2050

Key Highlights:

• Copper demand to increase by 1 million tonnes annually until 2035.
• Global demand expected to grow by 70% to reach 50 million tonnes annually by 2050.
• Energy transition technologies, including electric vehicles (EVs), are driving demand.
• Copper consumption in the digital sector is projected to increase from 1% to 6% by 2050.
• Significant supply challenges, including rising production costs and declining ore grades.Copper doubters may soon be scrambling as BHP’s latest report highlights a massive surge in demand for the metal, driven by the energy transition and expanding digital infrastructure. The report reveals that copper consumption is set to grow by 1 million tonnes annually until 2035, a staggering boost fueled by renewable energy projects and the electric vehicle (EV) boom.

As global production struggles to keep up, copper’s role in powering the world’s green energy shift is undeniable. BHP’s insights point to an expected 70% increase in global copper demand by 2050, pushing total annual consumption to 50 million tonnes. It’s a demand spike that could catch even the most seasoned traders off guard.

Energy Transition: Copper’s Critical Role

The energy transition is already placing immense pressure on copper supplies. With offshore wind farms requiring five times more copper per megawatt than gas-fired power plants, the demand for this metal is reaching new heights. And it’s not just renewable energy driving the surge. EVs, which use nearly three times more copper than traditional combustion vehicles, are expected to push the transport sector’s share of copper demand from 11% in 2021 to over 20% by 2040.

But the real game changer is the acceleration of copper use in digital infrastructure. As the world gears up for an AI-powered future, data centers are emerging as major copper consumers. By 2050, copper usage in this sector is set to grow sixfold, driven by an insatiable appetite for more processing power and faster internet speeds.

Supply Tightening Amid Rising Demand

While copper demand is skyrocketing, the supply side tells a different story. BHP's report points to rising production costs, declining ore grades, and increasing investment needs, all of which are tightening the market. Ore grades have fallen by 40% since 1991, forcing miners to dig deeper and process more material to meet the same output. It’s a challenge that could force the industry into a frenzy, with BHP estimating that a $250 billion investment will be needed to fill the widening gap between supply and demand by 2050.

Digital Boom Adds to Copper Pressure

The digital sector, while often overshadowed by the energy transition, is quickly becoming a major player in the copper market. With AI, 5G, and cloud computing becoming cornerstones of modern economies, copper is indispensable for building out the infrastructure that powers these technologies. From servers to smart grids, the demand for copper in digital applications is set to jump from 1% of global usage today to 6% by mid-century. The rapid growth in this sector could further tighten supply, putting additional pressure on copper producers to scale up.

What’s Next for Copper?

BHP’s report paints a clear picture: the future of copper is bright, but supply constraints will continue to challenge the industry. With the energy transition and digital expansion demanding more copper than ever, traders and analysts alike will need to watch the market closely as prices respond to growing pressures. For now, copper remains one of the most critical metals powering our global shift towards sustainability and technological innovation.