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Copper may not command headlines quite like gold or silver, but it shouldn't be overlooked. Often named "Dr. Copper" for its reputation as a barometer of global economic health, this metal could be approaching a major inflection point.
Over the past year, the Global X Copper Miners ETF ( COPX +3.01% ) has surged 37%. Demand for copper is climbing. Meanwhile, aging mines are producing less, and new supply won't hit the market fast enough.
This powerful combination could send copper prices higher over the next decade. Here are three trends that could drive copper prices higher in 2028 and beyond. Today's Change ( 3.01 %) $ 2.51 Current Price $ 85.91 1.
Hyperscale data centers require massive amounts of copper Hyperscalers are racing to build data centers and are spending massively to do so. Major technology companies Alphabet , Amazon , Microsoft , and Meta Platforms are spending $735 billion on capital expenditures this year alone , much of which is going toward data centers. According to McKinsey projections, data center investments could reach $7 trillion by 2030.
Copper is essential for data centers due to its superior electrical conductivity and thermal efficiency. It is embedded in thousands of heavy busbars that distribute high-amperage electricity across server racks, power distribution units, and complex switchgear systems. Extreme heat densities from modern chips require advanced liquid cooling loops that rely on copper heat sinks, heat exchangers, and extensive distribution piping.
Image source: Getty Images. Hyperscale data centers require massive amounts of copper. According to the Copper Development Association, these next-generation data centers can require up to 50,000 metric tons of copper .
Conventional data centers use between 5,000 and 15,000 tons of copper. S&P Global forecasts copper demand could rise 50% by 2040, with AI and data center copper demand tripling over the same period. 2. Power grid and infrastructure upgrades must be made to meet growing demand for electricity Data center infrastructure is just one part of the equation.
The other is power. Regional electricity grids in the United States and Europe have historically grown predictably. However, as more data centers come online, power grids must expand and upgrade aging infrastructure to meet demand.
Additionally, the push for renewable energy systems, such as utility-scale solar arrays and offshore wind turbines, requires significantly more copper per megawatt of capacity than fossil fuel plants, primarily for generator coils, collector cables, and long-distance transmission conduits. Today, utilities face the challenges of replacing old power lines while interconnecting distributed renewable energy sources. Electricity demand is only growing.
According to an analysis by the Bank of America Institute, U.S. electricity demand is projected to grow 2.5% annually through 2035. This rate is five times faster than in the previous decade, highlighting the urgent need to upgrade the aging power grid. Upgrading the power grid can take anywhere from four to 12 years, including installing new transmission lines, upgrading substations, and securing power.
According to the International Copper Association, roughly 44% of all copper produced goes to power generation, distribution, and transmission. 3. Demand could outstrip supply as fewer greenfield mines come online Demand trends are surging. Meanwhile, copper mine supply is deteriorating.
In Chile and Peru, major copper producers face declining ore grades . Decades of continuous extraction mean miners are left processing lower-grade rock, often yielding less than half a percent of copper per ton of mined material. As a result, operations must process far more volume, driving up operating expenses.
Image source: Getty Images. This wouldn't be a problem if new supplies were coming online. But few major greenfield operations are scheduled to do so over the next few years.
In mining, a greenfield project is the development of an entirely new deposit on previously undisturbed land. These projects can bring large volumes of copper to market, unlike brownfield mines, which simply expand existing mines. Greenfield developments have become rare.
According to S&P Global Market Intelligence , these developments could take 16 to 18 years to come online, from initial exploration and discovery to regulatory approvals and commercial production. After the commodity crash in 2015, miners were penalized for cost overruns on megaprojects, and fewer greenfield projects followed. Investors should keep a close eye on copper Copper markets may find temporary relief in 2027 as brownfield mine expansions ramp up, elevated prices encourage scrap recycling, and softer construction activity in China tempers demand.
By 2028, structural supply constraints could become clear as AI data center construction and power grid upgrades accelerate. With few major greenfield mines coming online, copper deficits could grow and drive prices higher through the end of the decade.
Source: The Motley Fool
