Mechanical, electrical and plumbing systems could be affected as copper’s price is hiked amid the global energy transition. Barrett Harris breaks down the numbers
For decades, copper has followed a cyclical pattern, with prices rising during periods of industrial expansion and falling during economic downturns. Today, however, the forces shaping the market point to a more fundamental shift.
Long term, technology-driven trends, deeply embedded in the global energy transition, are moving copper from a traditional cyclical commodity to a structural necessity for the modern global economy.
Copper demand continues to grow across established sectors such as construction, manufacturing and power infrastructure, particularly in China and India as both economies urbanise and expand their electricity networks. But the real shift stems from new and rapidly expanding industries that barely existed 20 years ago.
Data centres, driven by AI, cloud computing and high-density digital infrastructure, are emerging as major consumers, with the global energy and data-centre ecosystem expected to require around 500,000 tonnes of copper annually by 2030. At the same time, electric vehicles (EVs) and other renewable energy systems are embedding copper into every stage of the energy transition. EVs use four times more copper than traditional vehicles, while wind and solar installations require copper for cabling, transformers, and substations.
Total energy transition-related copper demand is expected to rise by 81.4% between 2025 and 2040 (an average of 5.1% per year), reaching 36.9% of global copper demand by 2040 (see figure 1 below). Construction will remain a key consumer of copper, accounting for an estimated 22.9% of global demand by 2040. This is driven by copper use in wiring, plumbing, HVAC and sustainability systems such as heat pumps and EV charging. This reinforces the shift toward copper becoming a structural rather than cyclical commodity.
The supply picture for copper is markedly different. Although global mine production has grown over the past three decades, accelerating particularly from the mid-1990s as China’s industrialisation reshaped global markets, supply growth is now struggling to keep pace with rising structural demand.
The International Copper Study Group (ICSG) estimated global copper reserves of 980 million metric tonnes in 2024, suggesting a healthy supply pipeline. However, the practical challenges of bringing new supply to the market are increasing. Ore grades continue to decline, particularly in major producing countries such as Chile and Peru, and the development of new mines typically takes 10 to 20 years. In addition, labour disputes, water scarcity, political instability and permitting delays frequently disrupt mining. Recent incidents, such as the Grasberg mudslide in Indonesia, which temporarily removed around 4% of global supply, underline how fragile the system has become.
Analysts estimate that meeting future demand may require up to 100 new copper mines worldwide by 2035, a 14.1% increase in global capacity. This represents a significant challenge, particularly given that capital costs can exceed $5bn per mine. Recycling will help with the demand, with the ICSG estimating that around one-third of global supply already comes from recycled copper. However, limited scrap availability and inefficient collection mean that an estimated 40-50% of recyclable copper goes to landfill or gets abandoned, making it harder for recycled supply to close the gap.
The combination of rising demand and constrained supply has already pushed copper prices sharply up, increasing by 93.6% over the past decade. A key driver is the shortage of raw copper available for smelters, which has intensified competition and pushed prices higher.
Companies are also importing copper earlier than usual, ahead of potential US tariffs, adding further pressure. At the same time, miners are increasingly processing lower‑grade ores, which are more expensive and less efficient to extract. With the energy transition accelerating, these upward price pressures are unlikely to ease.
In the medium term, copper prices are expected to remain elevated and volatile. The market is structurally tight, and any disruption, whether geological, political, or logistical, can trigger rapid price movements.
For the construction sector, this shift in copper pricing has direct consequences, with mechanical, electrical and plumbing services being impacted the most. Copper is a fundamental component of electrical and public health systems, used extensively in cabling, busbars and certain pipework systems. Its role goes beyond distribution networks: copper is embedded within major plant and equipment such as transformers, high- and low-voltage switchboards and air-sourced heat pumps. Any sustained increase in copper prices, therefore, has a direct and immediate impact on project costs, tendering risk and supply‑chain planning. Contractors may face greater price volatility, longer lead times, and increased pressure to utilise alternative materials, aluminium cabling and busbars or steel pipework.
The broader market signal is clear. The widening gap between supply and demand, driven largely by the global energy transition, suggests that while short-term volatility will continue, the medium-term trajectory for copper prices is firmly upward. For industries that depend on copper, recognising this structural shift and planning for a sustained period of higher prices is now essential.
Barrett Harris is Senior Economic Analyst at Turner & Townsend.
