EVs, Cloud Services, and AI Will More than Double Demand for Copper by 2035

January 6, 2025

copper cables

Domestic consumption of copper currently stands at 1.5 million metric tons per year. U.S. mining accounted for 1.3 million tons.

Old (post-consumer) scrap, converted to refined metal, alloys, and other forms, provided an estimated 160,000 tons of copper in 2022, and an estimated 670,000 tons of copper was recovered from new (manufacturing) scrap derived from fabricating operations.

“Of the total copper recovered from scrap, brass and wire-rod mills accounted for approximately 85%; smelters, refiners, and ingot makers, 10%; and chemical plants, foundries, and miscellaneous manufacturers, 5%. Copper recovered from scrap contributed 32% of the U.S. copper supply. (Source for all data: USGS – see link below).

Although the U.S. has enough copper reserves and resources to meet current demand, geopolitical and logistical risks can disrupt copper supply – for example, a disruption to a key route, such as the Panama Canal, could wreak havoc. Currently, the U.S. imports 44% of its refined copper, according to Recycling Today.

As discussed in “Spotlight on Copper,” a 2023 ISRI (now ReMA) moderated panel discussion, in order to meet copper demand, the U.S. must retain its copper scrap versus exporting it. (See our 2023 write up of the discussion.)

That was then, this is now. According to projections in an August 2024 S&P Global report, U.S. copper demand is expected to more than double – to 3.5 million metric tons – by 2035. This demand represents a 112% increase or a compounded annual growth rate of 6.5%.

AI, data centers account for surging demand

AI data center

You’re already familiar with a few of the reasons for the increase in copper demand – including Electric Vehicles (EVs) and the charging stations needed to keep these vehicles running.

According to the U.S. DOE’s National Renewable Energy Laboratory study, the U.S. will require 28 million charging ports — with 26 million in residential properties and workplaces, and approximately 2 million public stations needed by 2030 to support 30M – 42M passenger vehicles.

The connected home is another factor increasing copper demand. The North American smart home market stands at USD 33.18 billion and is rapidly growing as consumers’ preference for housing with built-in connected solutions increases. Think connected everything: appliances (washers, dryers, refrigerators, stoves, etc.), garage doors, lights, etc. (Source: Fortune Business Insights)

The real demand, however, is coming from cryptocurrency mining, cloud services, and the explosive growth of AI. In fact, projected electricity consumption from data centers is expected to double by 2026, according to the International Energy Agency (IEA).

Because AI requires large amounts of computational power — both in terms of electricity and cooling systems — some analysts (called “copper bulls”) estimate copper demand to skyrocket over the next decade as power hungry data centers demand more energy. Other experts disagree and urge caution due to an offset to fiber optics; the computational power needed by data centers exceeds copper’s capabilities. (Source: S&P Global)

Implications for scrap recyclers

Many factors that impact the copper industry are out of our control — meaning, owners of small to mid-sized scrap recycling facilities. We can’t speed up how quickly a copper mine comes online or push Congress to designate copper a Critical Mineral.

According to the Copper Development Association (CDA), secondary copper production has declined drastically in the U.S. and accounts for less than 6% of production — and as was discussed by the ISRI panel, much of our copper scrap is exported. The CDA recommends creating policies that incentivize recycling and “investments in secondary refining infrastructure to . . . repatriate billions of dollars worth of exported scrap.”

In the meantime, yard owners and managers can continue to seek out improved efficiencies with regard to shredding, collection, and sorting of copper.

Is there another 1-2% of recoverable copper in shredder ASR (fluff) alone? Savvy operators are keeping quiet. However, there are growing numbers of wire chopping lines, sink-float systems, and grinders appearing in close proximity to volume shredding plants. These contribute to the copper yield rate, and the methods build on the extraction of proven dry system “finders” from Wendt / Tomra that continue to improve copper & stainless recovery.