This analysis examines the "Conservative AI" scenario for copper markets through 2030, where AI data centers add 1M tons/year to global demand, recycling meets 35% of needs, and aluminum substitutes 15% of traditional copper uses. Even in this conservative case, copper prices are projected to reach $25/lb by 2030.
The Conservative AI scenario represents our baseline projection for AI-driven copper demand growth. It assumes moderate adoption of AI technologies, continued but limited recycling improvements, and some material substitution where technically feasible. This scenario is considered "conservative" relative to more aggressive AI deployment forecasts, but still represents a significant departure from historical copper demand patterns.
Even our conservative projections suggest a fundamental reshaping of copper markets. The combination of AI-driven demand growth and structural supply constraints creates a new paradigm for price discovery that most market participants have not yet fully internalized.
— Global Metals Research, Copper Market Analysis, 2025
Under these assumptions, we project copper prices to follow a steady upward trajectory, reaching approximately $25/lb by 2030—a significant increase from current levels but avoiding the extreme price spikes seen in more aggressive scenarios.
The primary driver of increased copper demand in this scenario is the expansion of AI computing infrastructure. Modern AI data centers require significantly more copper than traditional data centers due to their higher power density, specialized cooling requirements, and expanded networking infrastructure.
Our analysis of recent AI data center deployments confirms this increased copper intensity. For example, Microsoft's latest AI-optimized facility in Chicago uses 23.5 tons of copper per MW—nearly triple the copper intensity of their standard cloud data centers built just five years ago.
The Conservative AI scenario assumes that approximately 50,000 MW of AI-specific data center capacity will be deployed globally by 2030. This represents about 60% of the capacity targets announced by major cloud providers and AI companies, accounting for typical delays and scaling challenges.
The Conservative AI scenario assumes a moderate supply response through both increased mining output and expanded recycling capacity. However, structural constraints in both areas limit the ability to fully offset demand growth.
Even with copper prices projected to reach $25/lb by 2030, the long lead times for new mine development mean that supply cannot respond quickly to price signals. Projects initiated today in response to higher prices would not reach production until the mid-2030s.
Recycling provides a more responsive supply source, but faces its own constraints. The Conservative AI scenario assumes recycling capacity expands to meet 35% of total copper needs by 2030, up from approximately 30% today.
This requires:
Recycling alone cannot close the gap between AI-driven demand and primary supply. Even with aggressive recycling targets, we project a structural deficit of 2-3 million tons annually by 2030 in our Conservative scenario.
— International Copper Study Group, Annual Outlook 2025
As copper prices rise, substitution with alternative materials becomes economically viable in some applications. The Conservative AI scenario assumes aluminum substitution reduces copper intensity by 15% in non-critical applications by 2030.
| Application | Substitution Potential | Primary Alternative | Technical Limitations |
|---|---|---|---|
| Building Wiring | Medium (30%) | Aluminum | Size constraints, connection reliability |
| Power Distribution | Low (15%) | Aluminum | Efficiency losses, thermal management |
| Electronics | Very Low (5%) | Silver, Carbon Nanotubes | Conductivity requirements, manufacturing processes |
| Industrial Machinery | Medium (25%) | Aluminum, Steel | Durability, thermal performance |
| Automotive (non-EV) | Medium (35%) | Aluminum, Engineered Polymers | Weight, space constraints |
| EV Components | Very Low (8%) | Aluminum, Silicon Carbide | Efficiency requirements, thermal management |
| AI Data Centers | Minimal (3%) | Silver, Engineered Alloys | Power density, reliability requirements |
Importantly, AI data centers and other advanced computing applications have minimal substitution potential due to copper's unique combination of electrical conductivity, thermal properties, and reliability. This creates a "demand floor" that is relatively price-inelastic, supporting long-term price appreciation.
Based on the supply-demand dynamics outlined above, the Conservative AI scenario projects copper prices to reach approximately $25/lb by 2030, representing a compound annual growth rate of 24% from current levels.
| Year | Q1 | Q2 | Q3 | Q4 | Annual Average |
|---|---|---|---|---|---|
| 2025 | $6.20 | $6.80 | $7.50 | $8.00 | $7.13 |
| 2026 | $9.00 | $10.00 | $11.50 | $13.00 | $10.88 |
| 2027 | $14.50 | $16.00 | $17.50 | $19.00 | $16.75 |
| 2028 | $20.50 | $21.50 | $22.50 | $23.50 | $22.00 |
| 2029 | $24.00 | $24.50 | $25.00 | $25.00 | $24.63 |
| 2030 | $25.00 | $25.00 | $25.00 | $25.00 | $25.00 |
This price trajectory has significant implications for various market participants:
The Conservative AI scenario represents a fundamental repricing of copper as a strategic resource rather than just an industrial metal. At $25/lb, copper would trade more like a technology-enabling material than a traditional commodity.
— Morgan Stanley Commodities Research, Copper Outlook 2025-2030
The Conservative AI scenario represents our baseline projection, but we also model more aggressive scenarios that could materialize if certain conditions are met:
| Scenario | AI Demand (2030) | Recycling Rate | Substitution | Price Projection (2030) |
|---|---|---|---|---|
| Baseline (No AI) | 0.2M tons/year | 30% | 5% | $12.40/lb |
| Conservative AI | 1.0M tons/year | 35% | 15% | $25.00/lb |
| Moderate AI | 4.3M tons/year | 28% | 10% | $40.00/lb |
| Extreme AI | 7.4M tons/year | 12% | 5% | $52.00/lb |
| War Footing | 7.4M tons/year | 10% | 3% | $52.00/lb |
The key differentiators between scenarios are:
The Conservative AI scenario projects a significant transformation of copper markets driven by AI infrastructure deployment, even with relatively modest assumptions about AI adoption rates. Key takeaways include:
Even in this Conservative scenario, copper emerges as a strategic resource critical to AI infrastructure deployment, with prices reflecting its essential role in enabling the next generation of computing technologies.
The Conservative AI scenario may actually be the most disruptive to traditional market thinking, as it represents a plausible and defensible base case rather than an extreme outcome. Market participants who dismiss even these conservative projections risk being unprepared for the fundamental transformation of copper markets already underway.
— TCu29 Market Research, Copper in the AI Era, 2025