Copper Supply Shortage Threatens Electrification Push

SEATTLE (Scrap Monster): Demand from electric vehicles and renewable energy is putting pressure on global copper supplies. Production has struggled to keep pace, which some analysts say could tighten the market. If that happens, prices may rise, creating a potentially attractive setup for investors who understand the risks and long-term outlook.

Reasons copper prices have been trending upward in 2025 include strong demand from China, declining inventories, and production issues in major mining regions such as Chile and the Democratic Republic of the Congo (DRC).

Despite some recovery in output from producers like Codelco, the Chilean state-owned copper mining company, global stockpiles are nearing multi-year lows. Combined London Metals Exchange (LME) and COMEX warehouse inventories fell below 150,000 metric tons in early 2025, among the lowest levels in over a decade.

Meanwhile, copper-intensive sectors, especially electric vehicles, wind energy, and power grid expansions, are growing faster than new mining projects can be brought online. Tariff uncertainties and export restrictions compound the issue.

The IEA warns that without significant investment and policy intervention in mining and refining, global copper supply could fall 30% short of demand by 2035. This shortfall threatens the pace and affordability of the energy transition, potentially leading to delays and increased costs in deploying renewable energy technologies and electric vehicles.

Copper’s tight market dynamics, combined with long lead times for new projects, are creating a growing mismatch between green energy ambitions and the physical availability of resources.

Courtesy: www.valuethemarkets.com