The energy transition and electrification could transform global metal markets. Rising demand and a constrained supply could see copper, nickel, and aluminium face structural shortages by 2035, leading to a new bull market in metal prices
Simon Lacoume, metals sector economist at Coface, said, “Industrial metals are entering a new phase. The energy transition is creating significant new demand, whilst supply is becoming increasingly unresponsive. This combination could put sustained pressure on copper, nickel and aluminium and usher in a new bull market for metal prices.”
Urbanisation, infrastructure, and growing emerging economies will drive global consumption over the coming years, with the construction sector accounting for almost 50% of global steel consumption, whilst electrification already accounts for nearly three-quarters of global copper demand.
This demand is now being supplemented by the energy transition and digitalisation. Renewable energy, EVs, batteries, electricity grids, and data centres are especially metal-intensive. According to the IEA’s APS2 scenario, clean technologies could account for 35% of global demand for copper and nickel by 2035.
Faced with this acceleration, supply is struggling to keep up. Less than 1% of mineral exploration projects result in an operational mine, and developing new capacity at existing projects can take an average of almost 20 years. Low returns on investment ,declining ore grades in deposits and rising costs also limit producers’ ability to increase output rapidly.
Additionally, supply chains are highly geographically concentrated. Indonesia accounts for 67% of global nickel ore production, whilst China holds over half of the world’s refining capacity for several metals.
Trade restrictions are also rising, with 1,138 measures affecting the import or export of critical minerals in force by the end of 2025, compared to 357 ten years prior.
The supply-demand imbalance is expected to be particularly pronounced for metals essential to the energy transition. For aluminium, copper and nickel, demand will grow faster than supply over the decade, even without further acceleration in decarbonisation, but not all of these metals are affected in the same way.
Copper is essential for electrifying economies and developing digital infrastructure, but it could face a shortfall of between 1.5 and 6.5 million tonnes by 2035, potentially reaching 17% of global demand in a Net Zero Emissions scenario. The increase in data centres could also further exacerbate these pressures.
Nickel is most affected by the energy transition, driven by batteries and electric mobility. In a Net Zero scenario, the refined nickel market could face a shortfall of around 6.5 million tonnes by 2035, accounting for almost 35% of projected demand.
The aluminium market is also expected to become tighter. The shortfall could reach 5 to 15 million tonnes, representing nearly 10% of projected demand. In this case, the constraint stems less from resource availability than from industrial capacity, the necessary investment, and access to competitively priced electricity.
These tensions are expected to exert sustained pressure on prices, with Coface predicting that copper and nickel prices could almost double over the next decade, and aluminium is also expected to rise sharply. Additionally, steel and zinc appear less vulnerable, with less constrained supply conditions and more limited exposure to the new demands associated with the energy transition.
For manufacturers, the challenge will extend beyond price: securing access to critical metals, developing recycling and reducing material intensity could become key factors in competitiveness.
