AI, clean energy push may trigger new commodity supercycle: Report
New Delhi, July 7
Investments in artificial intelligence infrastructure, the global clean energy transition and supply-chain reshoring could trigger a new commodity supercycle, creating long-term opportunities in copper, power infrastructure and electrification-related sectors, according to a Centrum report.
The report said the world may be in the early phase of a commodity supercycle -- a prolonged period of rising commodity prices -- with the current upcycle still having significant room to run.
A supercycle happens when a huge, lasting jump in demand meets a supply base that takes years to grow.
Looking at over a century of inflation-adjusted commodity prices, the last major low came in 2020, it noted. Further, the current upcycle is around six years old and, based on past cycles that typically lasted 13-21 years, it may still have further room to run as prices remain below their long-term average.
"Dating 113 years of inflation-adjusted prices puts the last low in 2020; we are about six years into an upswing that has historically run 13-21 years, with prices still slightly below their long-run average, room to rise, not a peak to fear," it said.
Further, short-term volatility in gold and oil has faded, while structural strength is emerging in copper due to supply constraints which is also reflected in Indian equities.
Three demand engines are pulling at once while supply struggles to respond. AI-driven computing is becoming a major driver of global power demand. Data centres consumed around 485 TWh of electricity in 2025, and this is expected to nearly double to about 950 TWh by 2030, accounting for nearly 3 per cent of global electricity use.
Furthermore, copper supply is facing growing constraints, with new mines taking around 17-18 years from discovery to production and ore grades declining significantly over time. A slowdown in major discoveries has further tightened the supply pipeline, with the IEA projecting a potential 30 per cent copper supply gap by 2035 and S&P expecting a significant shortfall by 2040, the report said.
Additionally, the supercycle becomes policy-backed rather than a passing spike as "the metals are mined in a handful of countries, and one country, China, dominates the refining of almost all of them," it said.
Overall, AI-driven power demand is boosting copper consumption, but slow mine development is creating a supply gap, supporting expectations of a long-term commodity upcycle, the report noted.
— ANI
Reader Comments
Great to see AI and clean energy driving commodity demand. But the 30% copper supply gap by 2035 is concerning. India needs to seriously invest in exploration and mining, while also pushing for recycling. We can't afford to be caught off guard when global prices spike. Also, it's high time we reduce dependence on China for refining.
This supercycle talk feels like déjà vu from 2020-21. But the AI angle is new - data centres nearly doubling power use by 2030 is huge. India is setting up massive data centre parks, so copper will be critical. The report is right that supply constraints will keep prices elevated. Let's hope our companies are ready to ride this wave. 🙏
As an investor, this is fascinating. The historical pattern of supercycles lasting 13-21 years suggests we're still early. Copper especially looks promising with supply constraints and growing demand from both AI and green energy. But I'd be cautious about over-optimism - past cycles had their share of volatility. Diversification is key.
The transition to clean energy is inevitable, but we must ensure it doesn't become another resource curse. India has significant copper reserves that remain under-explored. With the government's focus on Atmanirbhar Bharat, we should expedite mining clearances and adopt modern technologies. Also, recycling copper from e-waste is a huge opportunity that we're ignoring. Let's not just be consumers in this supercycle.
Interesting to see how AI is becoming a major electricity consumer. Data centre power demand doubling by 2030 means we need serious investment
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