FCX, GLNCY, RIO: Copper Shortage Poses 'Systemic Risks' as Big Tech Demands Soar

The shortage of copper supply amid accelerating demand, which is being fueled by the massive need for electricity to power gigantic artificial intelligence data centers, poses "systemic risks" to global industries, technological advancement, and economic growth, according to a new study by S&P Global (SPGI).Claim 70% Off TipRanks PremiumUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential According to the data analytics firm, the global supply of copper could hit a deficit of 10 million metric tons by 2040, while global demand is expected to increase by about 50% from 28 million tons currently to 42 million. The U.S. designated the base metal as a "critical mineral" in November last year. Humanoid Robot Boom Sets Stage for Next Copper Crunch In addition to AI data centers, the race to develop humanoid robots could be the next frontier of demand, adding to sustained demand from the core economic sectors (appliances, computers, construction, and manufacturing), electric vehicles and renewables, and defense. The geographic concentration of smelting and refining capacity, especially in China, adds to these risks. "The intersection of accelerating demand, constrained supply, and concentrated processing capacity creates systemic risks that require responses from policymakers, regulators, industry, and investors," S&P Global explained in the report tagged Copper in the Age of AI: Challenges of Electrification. "The choices made in the coming years will determine whether copper remains an enabler of progress or becomes a bottleneck to growth and innovation," noted Daniel Yergin, vice-chair of S&P Global, who co-chaired the study. Copper Producers Cut 2026 Supply Forecast over Tariff Fears S&P's study comes as disruptions to copper mining and concerns over future tariffs from the U.S. government have driven the price of the base metal to a record-high price, reaching $12,000-plus in late December. U.S. inventories of the metal also surged last month as traders hurried to ship refined copper into the country ahead of potential tariffs slated for 2027. In addition, major copper producers, including Freeport-McMoRan (FCX), Glencore (GLNCY), and Rio Tinto (RIO), have lowered their production-level forecasts for this year. This is even as analysts on Wall Street expect copper to lose its shine this year. What Are the Best Metal Stocks to Buy? Using the TipRanks Stock Comparison tool, investors can identify which copper and metal producers are worth buying at the moment, as deemed by Wall Street analysts. Please refer to the image below.