A GLOBAL copper shortage could be looming as the rapid expansion of artificial intelligence and electricity networks drives demand for the metal, investment experts have warned.
Aberdeen Investments has predicted that worldwide copper production could fall this year despite growing demand from AI data centres, renewable energy projects and electrification.
The investment firm warned that supply constraints, rising production costs and geopolitical tensions could push copper prices even higher in the coming years.
Copper prices have already risen by more than 36% in the 12 months to 30 September 2026.
The warning comes ahead of London Metal Exchange (LME) Week, when representatives from the global metals and mining industries will gather in the capital.
Iain Pyle, Senior Investment Director at Aberdeen Investments and Co-Manager of the abrdn Future Minerals Fund, said: “Copper is the clearest example of a market where demand is structural but supply can’t keep pace.
“Because of the potential for US tariffs, a large share of the world’s copper is now stored in the US, and it isn’t clear those stocks will be available to the rest of the market.
“At the same time, Chinese inventories look exceptionally low and premiums there are rising.
“With global mine supply continuing to disappoint, it’s likely we see global copper production decline this year.
“That’s remarkable given the consensus positive view on the metal and the need to invest in supply.
“Permitting, a lack of skilled labour and rising costs are all making new projects harder to develop.”
According to the International Energy Agency (IEA), global copper supply could fall around 30% short of projected requirements by 2035.
The agency has also highlighted declining ore quality and a lack of major new discoveries as challenges facing the mining industry.
Aberdeen Investments said the rapid expansion of AI infrastructure was creating an additional source of demand for copper, alongside electricity grid upgrades and electric vehicles.
By 2030, data centres alone could account for 2% of global copper demand and 3% of rare earth demand, according to IEA estimates cited by the firm.
Mr Pyle warned that sustained higher copper prices may be necessary to encourage companies to develop new mines.
He added: “There is still some risk of a pullback around tariff announcements, but we see the underlying fundamentals as clearly bullish, and the potential for a spike in prices has increased.”
The firm also warned that geopolitical tensions were increasing competition for other critical minerals, including lithium, uranium and rare earth elements.
China currently dominates the processing of many strategic minerals, accounting for around 91% of global magnet rare earth refining in 2024, according to the IEA.
Meanwhile, lithium prices have risen more than 80% over the past year, although they have fallen sharply in recent months.
Aberdeen Investments said it remained cautious about lithium’s short-term outlook but expected longer-term demand to be supported by battery technology and energy storage.
Tiago Rodrigues, Investment Director at Aberdeen Investments and Co-Manager of the abrdn Future Minerals Fund, said: “This isn’t a tactical trade.
“The world is likely to need substantially more copper, lithium, uranium, rare earths and tungsten between now and 2050.
“The question for long-term investors is whether their portfolios are positioned for it – and many are not.”
