If you’ve been following the copper market, you probably know it’s about to get a lot busier. Over the next decade, demand for copper is expected to rise sharply, driven largely by the booming artificial intelligence sector and Europe’s plans to increase defense spending.
The London Metal Exchange (LME) recently pointed out how fragile global supply chains have become, especially with rising trade tensions. Matt Chamberlain, CEO of the LME, says nearly every nation is focusing on where their copper comes from and how to keep supply steady. There’s a big push to diversify sources and reinvest in smelting capacity to avoid disruptions.
Europe’s defense budgets are growing fast. Spending there is projected to hit 3.5% of GDP by 2027, which means copper demand tied to military upgrades could increase by as much as 40,000 tonnes a year. But it’s not just tanks and planes, building and upgrading military infrastructure like power and communication networks also needs a lot of copper. Analysts at Goldman Sachs expect this rearmament will boost Europe’s industrial metals demand by roughly 6%, which in turn pushes global copper demand growth to 2.4% annually. Copper’s role in everything from military vehicles to secure communications means the defense sector is a significant part of what’s driving this change.
At the same time, the rise of AI means we’re building more data centers, and these facilities use tons of copper for wiring and cooling. What’s interesting is copper costs barely affect construction budgets since it’s less than 0.5% of overall expenses. That makes demand pretty steady, even if prices go up. Estimates suggest AI infrastructure alone could push copper use in power grids past one million tonnes each year by 2030. That means copper will be caught in a squeeze between traditional uses and new high-tech demand.
For traditional uses, about 90% of copper demand still comes from construction, electrical equipment, and general infrastructure projects. But with AI and defense spending ramping up, the copper market is becoming more complex and sometimes more volatile.
One big wildcard is trade tensions, especially between the U.S. and China. These tensions have exposed risks in relying too much on a single supply source and pushed countries to look for copper suppliers closer to home. For example, Germany’s approx. $585 billion (500 billion euro) infrastructure investment is aimed partly at tightening supply chains. But fragmented regulations across Europe can slow progress.
Copper prices already show these dynamics. LME copper futures are around $9,800 per metric ton as of October 2025. Goldman Sachs expects prices could rise further to between $10,000 and $10,750, thanks to tighter supply and growing demand from AI and governments.
So, the future of copper is a mix of the old and the new. It’s still powering our homes and cities but is becoming essential to the next wave of technology and global security. Keeping supply lines diverse and reliable will be key as copper plays a central role in shaping the world for years to come.
