The global energy transition and rapid electrification are expected to reshape metal markets over the coming decade. As demand accelerates and supply struggles to keep pace, copper, nickel, and aluminum are likely to face structural shortages by 2035, creating favorable conditions for a new bull market in industrial metals.
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 aluminum and usher in a new bull market for metal prices.
said Simon Lacoume, Metals Sector Economist at Coface.
Energy Transition Accelerates Global Demand for Metals
Even before the growth of low-carbon technologies, demand for industrial metals was supported by strong long-term trends. Urbanization, infrastructure development, and the continued expansion of emerging economies are expected to drive global metal consumption for years to come. The construction industry accounts for nearly 50% of worldwide steel consumption, while electrification already represents almost three-quarters of global copper demand.
Today, these established demand drivers are being reinforced by the energy transition and digital transformation. Renewable energy projects, electric vehicles, battery production, power grid expansion, and data centers all require substantial quantities of metals. According to the IEA’s1 APS2 scenario, clean energy technologies could account for as much as 35% of total global demand for copper and nickel by 2035.
Why Metal Supply Is Struggling to Keep Up
While demand continues to surge, supply growth faces significant challenges. Fewer than 1% of mineral exploration projects successfully become operating mines, and expanding production capacity at existing mining projects can take close to 20 years on average, compared with less than 15 years in the early 2000s. Lower investment returns, declining ore grades, and rising production costs further limit the ability of producers to rapidly increase output.
Supply chains are also highly concentrated geographically. Indonesia accounts for 67% of global nickel ore production, while China controls more than half of the world's refining capacity for several critical metals.
At the same time, trade barriers are increasing. By the end of 2025, 1,138 measures affecting the import or export of critical minerals were in place globally, compared with only 357 a decade earlier.
Copper, Nickel and Aluminum Expected to Face Structural Shortages by 2035
The imbalance between supply and demand is forecast to be particularly severe for metals that are essential to the energy transition. Demand for aluminum, copper, and nickel is expected to outpace supply throughout the next decade, even without additional acceleration in decarbonization efforts. However, the extent of supply pressure varies by metal.
Data used for the graph in .xlsx format
Copper, a critical material for electrification and digital infrastructure development, could face a supply deficit ranging from 1.5 million to 6.5 million tonnes by 2035, depending on the scenario. In a Net Zero Emissions scenario, the shortage could reach as much as 17% of global demand. The rapid expansion of data centers could further intensify supply pressures.
Nickel is expected to be the metal most heavily impacted by the energy transition, driven largely by growing demand from electric vehicle batteries and energy storage systems. Under a Net Zero scenario, the refined nickel market could experience a shortfall of approximately 6.5 million tonnes by 2035, equivalent to nearly 35% of projected demand.
The aluminum market is also expected to tighten significantly. Supply deficits could reach between 5 million and 15 million tonnes, representing around 10% of projected demand. In this case, constraints are driven less by resource availability and more by industrial capacity, required investment levels, and access to competitively priced electricity.
A New Bull Market for Industrial Metals
These growing supply-demand tensions are expected to support higher metal prices over the long term. Coface forecasts that copper and nickel prices could nearly double over the next decade, while aluminum prices are also expected to rise significantly. By contrast, steel and zinc appear less exposed to supply shortages, benefiting from more flexible supply conditions and lower exposure to energy transition-related demand growth.
Data used for the graph in .xlsx format
For manufacturers and industrial businesses, the challenge will increasingly extend beyond managing costs. Securing reliable access to critical metals, investing in recycling solutions, and improving material efficiency are expected to become key competitive advantages in the years ahead.
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1 International Energy Agency
2 Announced Pledges Scenario
