U.S. Copper Demand Set to Surge Amid Electrification Plans and Supply Chain Risks

The U.S. is set to see a dramatic rise in copper demand as it moves toward electrification. S&P Global Market Intelligence predicts demand will be 12% higher by 2035 than pre-IRA levels. This surge is driven by the energy transition, EVs, and renewable energy. Copper demand will double current consumption rates. The study highlights copper’s crucial role in the future energy grid. However, even with efficient recycling, increased mining is necessary.

Supply Challenges Emerge: Domestic Production and Import Reliance

Despite significant copper reserves, the U.S. faces challenges meeting its needs. The permitting process means new mines could take 20 years to come online. Currently, the U.S. imports 44% of its copper, mainly from Latin America. This reliance poses a risk. Geopolitical and supply chain disruptions could threaten imports.

Geopolitical Risks and Panama Canal Vulnerability Highlighted

A significant vulnerability is the U.S. dependence on the Panama Canal. It handles 95% of U.S. copper imports. Climate change disruptions, like low water levels, could strain deliveries. Growing demand from other nations, including China and Western Europe, could further limit imports from Latin America. The U.S. is already competing with China for copper.

Multi-Pronged Strategy Needed for Copper Supply

To meet demand, S&P Global stresses a multi-pronged strategy. Increased domestic production, improved mining technologies, expanded import support, and material substitutions are necessary. Copper remains irreplaceable for many sectors, especially EV batteries, wind and solar energy, and grid infrastructure.

Policy Recommendations Aim to Secure Copper Supply

The Copper Development Association (CDA) calls for copper to be classified as a critical mineral. This ensures it receives the same support as nickel, lithium, and cobalt. The CDA supports the Critical Mineral Consistency Act. This aims to align critical mineral definitions between the U.S. Geological Survey and the Department of Energy. The Act would grant copper access to federal programs. This ensures the U.S. is better prepared to meet rising demand and reduce foreign reliance.