Archive · 15 Aug 2026
Copper's Rally Fueled by EVs and Grids, Not AI
Copper is a metal used to make wires and machines.
Its price has gone up a lot in the last year.
Some people thought computers used for artificial intelligence would need lots of copper.
But experts say electric cars and power grids need much more.
Power grids bring electricity to homes and schools.
Electric cars use copper in their motors and batteries.
AI computers do use copper, but not as much as people think.
There is also not enough new copper being found in mines.
That makes copper more expensive.
Experts think prices will stay high.
Copper has rallied more than 50% over the past year and trades near its January peaks on the London Metal Exchange.
UBS estimates data centres accounted for only 3% of global copper demand in 2025, rising to just 4% by 2030.
Electrification demand from EVs, renewables, storage, and grid expansion added nearly 5 million tonnes of copper demand from 2019 to 2025.
The US hosts nearly 60% of global data centre installations but accounts for less than 10% of global refined copper demand.
Analysts see a base case of $12,000-$12,500 per tonne, with downside risks from a Chinese slowdown and forecast surpluses in 2026-2027.
- Who
- UBS, Mirae Asset Sharekhan, and HDFC Securities analysts, including Mirae Asset Sharekhan economist Netra Deshpande
- What
- Copper's 50%+ price rally, driven primarily by electrification demand from EVs, renewables, and power grids rather than by AI data centres
- When
- Over the past year, with the analysis reviewing 2025 data and forecasting through 2030 and 2040
- Where
- Global markets centred on the London Metal Exchange, with key focus on Chile, the US, China, and Europe
- Why
- Strong electrification-driven demand and constrained mine supply outweigh the relatively small demand contribution from AI and data centres
AI as the Copper Demand Driver
Electrification as the Core Driver
What truly drives copper demand
AI as the Copper Demand Driver
AI data centres and their power infrastructure are a major new source of copper demand, with rapid growth expected as AI training clusters and liquid cooling expand.
Electrification as the Core Driver
EVs, renewables, and grid modernisation represent the larger, multi-decade structural demand base; AI-linked demand remains small, at 3-4% of global consumption, and is not a standalone 'copper supercycle'.
Price outlook over 12 months
AI as the Copper Demand Driver
Bull case: copper may cross $15,000 per tonne if supply disruptions worsen and AI-driven grid investment grows faster than projected.
Electrification as the Core Driver
Bear case: prices could fall below $10,500 per tonne if a slowdown in China's property and manufacturing sectors outweighs AI-related demand gains and forecast surpluses materialise.
- Copper price rally
- More than 50% over the last year, trading near January peaks on the LME
- Data centre share of global copper demand
- 3% in 2025, expected to reach 4% by 2030 (UBS)
- Global copper consumption
- Approximately 28-30 million tonnes per year
- AI-linked copper demand 2025
- 900 kilotonnes (700 kt data centres, 200 kt power generation)
- Electrification demand added (2019-2025)
- Nearly 5 million tonnes
- US data centre installations
- Nearly 60% of the world's total; about 25% of US copper demand
- China's share of global copper consumption
- More than 50%
- 12-month copper price outlook
- Bull: above $15,000; Base: $12,000-$12,500; Bear: below $10,500 per tonne