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S&P Global has issued a warning regarding a looming copper shortage that poses a 'systemic risk' to global economic growth, with a projected deficit of 10 million tons by 2040. This shortfall is driven by the energy transition and the rising demand from the AI sector.

Global copper demand is expected to rise from 28 million tons last year to 42 million tons by 2040, a 50% increase. Asia is anticipated to account for 60% of this demand growth, fueled by electric vehicle adoption and upgrades to the power grid.

The demand for copper in AI data centers is projected to increase from 1.1 million tons in 2025 to 2.5 million tons by 2040. Additionally, defense spending, particularly due to the conflict in Ukraine and increased budgets in countries like Japan and Germany, will further drive copper demand.