The Copper Supercycle: Why the ‘Metal of Electrification’ Could Reach $15,000 Per Tonne by 2028

The copper market is experiencing the most severe structural deficit since the commodity super-cycle of 2003–2008. According to the International Copper Study Group (ICSG), global refined copper demand reached 26.8 million tonnes in 2025, while mine production grew by a meagre 1.2% to 22.4 million tonnes. After accounting for secondary (recycled) supply and stock drawdowns, the market posted a deficit of approximately 510,000 tonnes — the widest gap since 2012 and nearly double the 280,000-tonne shortfall in 2024.

What makes this deficit structural rather than cyclical is the asymmetry between the demand drivers and the supply response. On the demand side, the electrification mega-trend — spanning electric vehicles, renewable energy, grid modernisation, and data centres — is adding millions of tonnes of incremental copper demand per year. On the supply side, mine output is constrained by declining ore grades, water scarcity in key producing regions, permitting delays, and community opposition. The average copper ore grade at major mines has fallen from 1.6% in 2000 to 0.6% in 2025, meaning operators must process nearly three times more rock to produce the same amount of metal.

Goldman Sachs’s commodity research desk has called copper “the new oil” — a deliberate provocation that underscores a fundamental point: modern electrification is as dependent on copper as twentieth-century industrialisation was on petroleum. Unlike oil, however, there is no OPEC-style swing producer capable of releasing strategic reserves to cap prices. LME and SHFE warehouse inventories combined sit at roughly 285,000 tonnes, equivalent to just four days of global consumption — the thinnest buffer since 2005, the year preceding the last copper price explosion.

Electric vehicles are the single largest source of incremental copper demand. A conventional internal combustion engine vehicle uses roughly 23 kilograms of copper for wiring, radiators, and electrical components. A battery-electric vehicle requires approximately 83 kilograms — 3.6 times more — driven by the high-voltage battery pack, inverter, onboard charger, and electric motor windings. BloombergNEF projects global EV sales of 28 million units in 2026, implying EV-specific copper demand of 2.3 million tonnes, up from 1.4 million tonnes in 2024.

Renewable energy infrastructure amplifies the divergence. Offshore wind turbines require 8–12 tonnes of copper per megawatt of installed capacity; solar photovoltaic systems need 4–5 tonnes per MW. The IEA’s accelerated energy transition scenario calls for 1,200 GW of new renewable capacity per year by 2030, translating into an additional 2.4 million tonnes of annual copper demand from this sector alone. When combined with EVs, total green-economy copper demand reaches 4.7 million tonnes per year by 2030 — equivalent to 18% of 2025 production.

Grid infrastructure is the often-overlooked third pillar. Electrification of transport and heating, distributed solar generation, and the proliferation of data centres all require massive upgrades to transmission and distribution networks. The US Department of Energy estimates the country needs 47,000 miles of new high-voltage transmission lines by 2035. Globally, grid copper demand is forecast to grow at 3.5% annually through the decade — a rate that sounds modest until you realise the base is already enormous at roughly 6 million tonnes per year.

The artificial intelligence infrastructure buildout has introduced a copper demand vector that barely registered in forecasts three years ago. A hyperscale data centre rated at 100 MW of IT load requires approximately 3,600 tonnes of copper for power distribution, cooling systems, backup generators, bus bars, and cabling. With global data centre power consumption projected to double from 460 TWh in 2023 to over 1,000 TWh by 2028, the sector could consume an additional 800,000–1,200,000 tonnes of copper annually by the end of the decade.

The concentration of builds in the United States compounds the problem. Virginia’s “Data Centre Alley” in Loudoun County already represents the world’s highest concentration of digital infrastructure, and new campuses are proliferating in Texas, Arizona, Georgia, and the Carolinas. Each new campus requires not only internal copper wiring but also upstream grid connections — substations, transformers, and feeder cables — that depend heavily on copper conductor.

What makes data centre demand particularly challenging for the copper supply chain is its speed. A new copper mine takes 12–16 years from discovery to first production. A 100 MW data centre can be permitted, built, and energised in 18–24 months. This temporal mismatch between demand creation and supply response is the defining feature of the current copper market — and the primary reason prices are expected to rise significantly.

The copper mining industry is facing an unprecedented combination of geological, regulatory, and financial headwinds. The average time from discovery of a new copper deposit to first commercial production is now 16.5 years, according to S&P Global’s mining intelligence division. This lead time has lengthened by over 60% since the early 2000s, driven primarily by more complex permitting processes, stricter environmental regulations, and increased community opposition in host countries.

Capital costs have escalated in parallel. Developing a new greenfield copper mine of meaningful scale (200,000+ tonnes per year) now requires $8–12 billion in upfront investment. Anglo American’s Quellaveco project in Peru cost $5.5 billion for 300,000 tonnes of annual capacity; Rio Tinto’s Resolution Copper project in Arizona, one of the world’s largest undeveloped deposits, faces both a $10+ billion price tag and ongoing legal challenges that could delay its opening beyond 2035.

Existing mines are struggling to maintain output. Chile’s Codelco, the world’s largest copper producer, saw output decline to 1.32 million tonnes in 2025 from 1.76 million tonnes in 2018 — a 25% drop driven by ageing deposits, water restrictions in the Atacama Desert, and delayed expansion projects. Zambia, the Democratic Republic of Congo, and Indonesia — collectively responsible for 20% of global supply — face their own challenges ranging from power shortages to regulatory uncertainty.

Secondary (recycled) copper currently supplies approximately 4.5 million tonnes per year, representing about 17% of total refined copper supply. While recycling rates for copper are relatively high compared to other metals — around 30% of end-of-life copper products are recovered — the growth rate of recycled supply is constrained by the longevity of copper-containing products. Copper wire installed in buildings has a service life of 30–50 years; wind turbines last 25–30 years. The green infrastructure being built today will not enter the recycling stream for decades.

Material substitution offers another partial mitigation, but with significant limitations. Aluminium can replace copper in some power transmission applications (overhead lines, for example), but it requires larger cross-sections and more complex jointing. In high-performance applications — EV motors, transformer windings, data centre power buses — copper’s superior electrical conductivity (60.7 MS/m versus aluminium’s 37.7 MS/m) makes it effectively irreplaceable without significant performance penalties.

The recycling and substitution pathways, while important, can collectively offset only an estimated 15–20% of the projected demand growth. They cannot close a multi-million-tonne supply gap in the timeframe required. This reality is why the most cited commodity research institutions — Goldman Sachs, Wood Mackenzie, CRU Group, and the IEA — have all converged on significantly higher long-term copper price forecasts.

LME copper prices averaged $9,800 per tonne in 2025 and reached $10,200 per tonne in early 2026 as deficit signals intensified. Multiple institutional research houses have published price targets that would represent new all-time highs in real terms. Goldman Sachs’s base case calls for $12,000 per tonne by year-end 2027, with a bull case of $15,000 in their “green demand acceleration” scenario. Bank of America forecasts a $13,000 average in 2028; Wood Mackenzie’s long-run incentive price sits at $11,500.

The concept of “incentive pricing” is critical to understanding these forecasts. An incentive price is the copper price at which it becomes economically viable to develop new mines despite rising costs, lower grades, and higher risk premiums. With all-in sustaining costs for new greenfield projects estimated at $7,500–9,000 per tonne, prices need to rise to $11,000–15,000 to generate the returns necessary to attract the $150+ billion in mining investment required over the next decade.

Speculative positioning adds fuel to the fire. Managed money net long positions on COMEX copper futures reached 65,000 contracts in January 2026, near the all-time high set in April 2024 when prices briefly touched $11,100. Physical market tightness — reflected in spot premiums of $80–120 per tonne in China and $100–150 in Europe — suggests this is more than speculative froth. The combination of declining inventories, widening deficits, and accelerating demand points to a sustained price increase rather than a temporary spike.

Investors looking to position for the copper supercycle have several options spanning direct commodity exposure to equity plays. The most direct routes include copper futures on the LME and COMEX, physically-backed copper ETFs (though these remain limited by storage costs), and copper-focused ETFs such as the United States Copper Index Fund (CPER) and the Global X Copper Miners ETF (COPX).

On the equity side, the largest pure-play copper miners include Freeport-McMoRan (FCX), the world’s largest publicly traded copper producer with significant exposure through its Grasberg mine in Indonesia and Cerro Verde in Peru; Southern Copper (SCCO), which operates massive reserves in Mexico and Peru; and First Quantum Minerals, whose Cobre Panamá mine remains a high-profile case study in country risk after Panama ordered its closure in late 2023. Diversified miners with significant copper exposure include BHP, Rio Tinto, Anglo American, and Glencore.

For those with a more speculative appetite, copper exploration and development companies offer leveraged exposure to rising prices. Ivanhoe Mines, whose Kamoa-Kakula complex in the DRC is ramping toward 600,000 tonnes of annual production, represents one of the few new projects capable of meaningfully moving the global supply needle. The key risk across all copper equity investments is country risk — the majority of the world’s copper reserves are concentrated in jurisdictions where political, environmental, and regulatory risks are elevated.