Copper and Nickel Prices Set to Double by 2035 Amid Rising Demand and Supply Challenges

A recent study by the international financial services firm Coface, highlighted by Mining.com, predicts that the prices of copper and nickel could potentially multiply over the next decade. This anticipated surge is linked to increased demand stemming from construction activities, the transition to cleaner energy, and widespread electrification, alongside a supply that is expected to fall short of this growing consumption.

By 2035, aluminum, copper, and nickel are likely to face average supply deficits of about 10% relative to demand. Marcos Carias, a North American economist at Coface, noted that difficulties in scaling up production intensify these gaps. He mentioned that American import duties are part of a broader shift in metal trading dynamics, with trade restrictions on metals being a long-standing tactic that U.S. actions further complicate amid already constrained supplies.

This imbalance could lead to a prolonged period where prices for industrial metals remain high. The growing needs of clean energy solutions, data centers, electric vehicles, battery storage, and power grid expansions are rapidly consuming these materials, while producers struggle to ramp up new supply lines. Coface argues that this pressure reflects structural challenges that elevated prices alone may not quickly address, contrasting with short-term commodity price fluctuations.

Future Metal Demand Outstrips Supply Growth

Coface's report highlights numerous challenges that are intensifying supply constraints in the mining sector, including the extended timelines now necessary to secure mining permits, which are delaying essential production to maintain the supply chain. Furthermore, a more restrictive trade environment is evident, with a significant rise in mineral import and export restrictions—from 357 a decade ago to 1,138 today—compounded by recent U.S. tariff measures that have further tightened market conditions. According to Coface, this situation indicates that producers in the U.S., Canada, and Mexico should prepare for extended periods of elevated metal costs rather than expecting relief from upcoming trade agreements.

The analysis also uncovered additional factors contributing to the tightening of ore supply, such as unpredictable exploration results and the prolonged processing times for launching new mining projects, which now range from 15 to 20 years. There is a lack of incentives to expand mining capacity, and value is increasingly captured in refining and processing rather than extraction. Future prices will depend not only on the growth in consumption but also on the ability of each metal's supply chain to adapt to these emerging constraints.

The drive towards energy transition is exacerbating existing structural tensions, as low-carbon technologies increasingly demand a significant share of metal resources. By 2035, clean-energy technologies may account for approximately 35% of global copper and nickel consumption. Coface projects a potential copper deficit of up to 17%, with the shortfall in refined copper possibly escalating from 1.5 million to 6.5 million tons - about 11% of projected demand. In a net-zero scenario, refined nickel could face a shortage nearing 35% of anticipated demand, primarily driven by battery production needs.

Unlike copper and nickel, an anticipated aluminum shortfall of 5 to 15 million tons, roughly 10% of expected demand, is predicted to arise from industrial and energy constraints rather than a lack of resources. When production costs or investment incentives trigger supply constraints, rising prices may spur additional production capacity and facilitate market equilibrium. However, when limitations are due to the unavailability of raw materials, high prices alone cannot alleviate the supply shortage, leading to persistent price pressures, the study indicated.

Coface predicts a shortfall in aluminum supply, ranging from 5 to 15 million tons - approximately 10% of the projected global demand. This deficit, unlike those seen in copper and nickel, is expected to arise from constraints in industrial capacity and energy rather than a scarcity of resources. The study explains that when supply issues are due to economic factors such as production costs or investment decisions, rising prices typically promote the development of additional production capacities, which can help balance the market more quickly. However, when the limitations are related to the availability of raw materials, higher prices alone are not sufficient to increase supply, leading to prolonged pressure on prices.