Supply-demand balance and resilience

For most of the past 70 years, copper supply and demand have remained broadly balanced, with the two moving closely together and the system experiencing little sustained pressure. The early 2010s were a notable exception, when a supply deficit exposed the system's sensitivity through increased price fluctuations.⁵⁰

Copper’s broad range of historical applications has supported sustained demand growth, creating relatively stable markets and pricing mechanisms. However, changing demand drivers are now creating a structural mismatch, as highlighted by the model.

The figure below indicates that, from the mid-2030s, supply and demand diverge for a sustained period, with realised supply falling meaningfully short of what the system requires, and unmet demand totalling 4.4 million tonnes by 2050 (growing from 2.8 million tonnes in 2040). This is not a temporary disruption or a single year with reduced production, but a prolonged structural supply constraint. Developments from 2020 onwards may already be signalling this shift.^{51 52}

Desired demand—the level of copper use the system would need without any constraints—keeps rising through to 2050, while real demand increasingly falls short of this in the 2030s as scarcity and price effects discourage consumption. By 2050, this gap reaches 9.8 million tonnes, larger than the unmet demand gap seen at any single point in the projection. This suggests that unmet demand alone understates the scale of copper scarcity. Some of its impact shows up earlier, as demand that never materialises, rather than as a shortfall that could be measured at a specific point in time.

Part of this divergence reflects a change in the character of demand rather than just its volume. Copper's traditional applications, such as construction and conventional transport, continue to grow in a fairly predictable manner, broadly tracking urbanisation and population growth. Demand associated with the energy transition is structurally different. An example is heat pump deployment, which is expected to increase copper demand rapidly over the coming decades, or electric vehicles, which require substantially more copper per unit than the internal combustion vehicles they replace. At the same time, the drivers of demand are becoming increasingly regionalised: in some parts of the world, demand continues to be driven primarily by urbanisation and infrastructure development, while elsewhere it is shaped by electrification policies and efforts to expand domestic manufacturing capacity.⁵³ The result is a demand base that is not only growing, but also becoming more diverse and potentially more difficult to plan supply around.

On the supply side, the model's declining primary supply trajectory reflects a broader, well-documented industry challenge: the increasing physical difficulty of finding and developing new copper resources. Ore grades have been declining globally for decades, meaning progressively larger volumes of rock must be processed to produce the same quantity of metal.⁵⁴ This challenge is compounded by a shrinking pipeline of new discoveries and the long lead times required to bring new deposits into production.⁵⁵ Production at several of the industry's largest and most established mines already reflects these trends through declining grades and reduced output.⁵⁶

None of this suggests that copper is running out in a geological sense. Rather, it indicates that supply may not be able to expand quickly enough to respond to rising demand, which is precisely the structural rigidity captured by the model's declining primary supply curve. Secondary supply continues to grow steadily and could overtake primary supply before 2050, representing a genuine structural improvement. However, even on this trajectory, secondary supply is unlikely to fully offset declining primary production. It is also worth noting that, unlike lithium and cobalt, for example, copper carries no strategic reserve in the baseline. As a result, the projected trajectory is not moderated by stockpile releases, but reflects the underlying physical and behavioural dynamics of the system.⁵⁷