A growth indicator with new influences
Innes reports a correlation of just 0.25 between copper and the ISM Manufacturing PMI, with an R-squared of 0.06, questioning the metal's reputation as a dependable gauge of global growth. Meanwhile, its correlation with technology equities is approaching three-year highs.
The analysis cites Bloomberg macro strategist Frank Monkam on the competing forces shaping copper: Chinese demand and global interest rates remain important, but AI spending has added another source of demand through data centers, electrification and semiconductor infrastructure.
That spending also exposes copper to financing risks. Innes warns that higher real yields and tighter credit conditions could undermine the capital-intensive AI investment cycle, prompting a financial-market repricing before physical demand shows meaningful deterioration. He argues that implied volatility near one-year lows may underestimate the potential disruption.
The scale of AI-related demand
Kpler's July 2026 estimates put capital spending by the largest cloud and platform companies at roughly $725 billion to $750 billion for the year, about 70% above 2025. It estimated that data-center construction alone would absorb roughly 500,000 metric tons of copper in 2026, approximately matching the entire year's increase in global consumption, which it put at about 450,000 metric tons, or 1.6%.
The amount of copper required varies by facility. Kpler used about 27 metric tons per megawatt as a benchmark for a modern data center, compared with 30 to 45 metric tons per megawatt for AI-dense halls. Its reference point was Microsoft's Chicago campus, with roughly 2,177 metric tons of copper across about 81 megawatts.
On October 20, 2026, Trafigura Group's head of industrial metals analysis, Henry Van, said hyperscalers' spending plans pointed to possible AI-infrastructure copper consumption of 2.5 million to 3 million metric tons in 2028, compared with Trafigura's estimate of about 1 million metric tons for 2026. He emphasized that the higher figure was not his base case. Market pricing implied about 1.6 million metric tons in 2028, still a 60% increase from 2026.
Wood Mackenzie also reported a rapidly expanding project pipeline on October 22. It was tracking more than 250 gigawatts of data-center projects worldwide, over three times the total a year earlier. It forecast a fivefold increase in AI data-center electricity demand between 2025 and 2030, with consumption exceeding 1,000 terawatt-hours by 2035.
Projects and designs leave room for uncertainty
Longer-term copper forecasts also span a wide range. A June 3, 2026, Reuters column by Andy Home reported that S&P Global expected data centers and associated infrastructure to use 2.5 million tons in 2040, up from 1.1 million tons in 2025. Depending on fast-changing variables, its 2040 estimate ranged from 1.7 million to 2.7 million tons.
Equipment design could reduce copper requirements. Reuters reported that replacing copper interconnect cabling between processor racks with fiber optics could lower data-center copper intensity by 4 to 5 tons per megawatt. Nvidia's proposed move to 800 volts would allow a wire of the same gauge to carry 157% more power, reducing the need for copper conductors.
The Reuters column also cited an Oxford Smith School and Marex Group study that described many announced megawatts of AI computing capacity as "bragawatts." The study expected delivery to be "delayed, lumpy, and constrained by physical realities" rather than treating announced capacity as assured construction.
Grid access was among those constraints. The study noted an average US grid-connection wait of four years during 2018–2023. In Ireland, data centers accounted for more than 20% of national energy consumption by 2021, after which a de facto four-year moratorium was imposed on new data-center connections.
Record prices amid uneven supplies
The demand debate comes alongside severe disruption in the refined copper market. Wood Mackenzie reported on October 22, 2026, that prices had reached a record $14,759 per metric ton.
According to the firm, US stockpiling had lifted domestic inventories to more than 170 days of consumption, while the rest of the world had only 48 days of cover and faced a deficit of 450,000 to 460,000 metric tons. It also reported a 5.2% decline in Chilean mine output in 2026.
China's demand shifts toward the grid
China remains central to copper consumption, accounting for roughly 56% of the global refined total, according to The Dark Side of the Boom. Innes argues that weak property activity and a fading credit impulse leave it poorly positioned to cushion an AI-led downturn.
Kpler's July assessment showed a shift within Chinese demand toward power grids and electrification. It estimated that State Grid investment was growing 35% to 40% year over year, offsetting weakness in property and solar. Other indicators were subdued: passenger-vehicle sales fell about 19% from a year earlier, while home-appliance sales increased just 1% in the first five months of 2026.
