Copper prices fell during Thursday’s trading despite positive long-term demand expectations for the industrial metal, as prices came under pressure from profit-taking.

Consultancy S&P Global said on Thursday that rapid growth in the artificial intelligence and defense sectors will drive global copper demand up by 50% by 2040. However, supply is expected to fall short of demand by more than 10 million metric tons per year unless recycling and mining activity is expanded.

Copper has long been widely used across construction, transportation, technology, and electronics, given its high electrical conductivity, corrosion resistance, and ease of shaping and manufacturing.

While the electric vehicle industry boosted copper demand over the past decade, the AI, defense, and robotics industries are expected to require significantly larger volumes of the metal over the next 14 years, alongside traditional consumer demand for air conditioners and other copper-intensive appliances, according to the report.

S&P Global estimates global copper demand will reach 42 million metric tons per year by 2040, up from about 28 million metric tons in 2025. Without new supply sources, roughly a quarter of that demand is likely to go unmet.

Dan Yergin, vice chairman of S&P Global and a co-author of the report, said: “The fundamental driver behind this demand is the electrification of the world, and copper is the metal of electrification.”

Artificial intelligence is one of the fastest-growing sources of copper demand, with more than 100 new data center projects launched last year, carrying a combined value of nearly $61 billion.

The report also noted that the war in Ukraine, along with moves by countries such as Japan and Germany to increase defense spending, is likely to further support copper demand.

Carlos Pascual, vice chairman of S&P Global and former US ambassador to Ukraine, said: “Demand for copper in the defense sector is almost completely inelastic.”

Nearly every electronic device contains copper. Chile and Peru are the world’s two largest copper producers, while China is the largest copper smelter. The United States, which has imposed tariffs on some copper products, imports about half of its annual copper needs.

The report does not factor in potential supply from deep-sea mining.

S&P published a similar report in 2022 that projected copper demand under a scenario in which the world reaches carbon neutrality by 2050, the so-called “net zero” target.

The report released on Thursday uses a different methodology, projecting copper demand based on a baseline scenario that assumes demand growth continues regardless of government climate policies.

“Energy transition policies have changed dramatically,” Yergin said.

In trading, March copper futures were down by $5.73 per pound at 14:47 GMT.

Bitcoin fell during Asian trading on Thursday, extending the reversal of the recovery seen at the start of the year, as risk appetite remained constrained amid rising geopolitical risks in Latin America and Asia.

Caution ahead of the release of US nonfarm payrolls data also limited investor appetite for large bets in cryptocurrency markets, with investors preferring to wait for clearer signals on the performance of the world’s largest economy.

Bitcoin declined by 1.5% to $91,093.8 by 00:06 ET (05:06 GMT), after touching an intraday low of $90,642.7 earlier in the session. The world’s largest cryptocurrency’s early-year recovery stalled after it largely failed to reclaim the $95,000 level.

Pressure on the crypto market also increased due to uncertainty surrounding digital asset treasury companies, particularly Strategy Inc, the largest institutional holder of Bitcoin. The company, which is down nearly 50% since the start of 2025, received only limited support after MSCI announced it would not proceed with a proposal to exclude digital asset treasury companies from its indices.

However, the index provider said it would move ahead with a broader review of listing requirements for companies within its indices.

Bitcoin recovery falters amid rising geopolitical risks

Risk appetite toward crypto-linked assets remained constrained by escalating geopolitical tensions in Asia and Latin America.

In Asia, a long-running diplomatic dispute between China and Japan intensified this week after Beijing imposed export restrictions on Tokyo and launched an anti-dumping investigation targeting Japanese chemical companies.

Chinese media also raised the possibility that Beijing could restrict key rare earth exports to Japan, a scenario that would carry serious implications for Japan’s large manufacturing sector.

The diplomatic dispute traces back to comments made by Japanese Prime Minister Sanae Takaichi in late 2025 regarding military intervention in Taiwan, which drew strong criticism and rejection from Beijing.

In Latin America, markets continued to monitor developments surrounding the US intervention in Venezuela, which resulted in the arrest of President Nicolas Maduro.

Reports indicated that US President Donald Trump is preparing to impose long-term control over Venezuela’s oil sector, a move that could anger China and fuel further political instability in the region.

The US intervention in Venezuela over the weekend had shaken financial markets earlier this week, boosting demand for safe havens such as gold and the dollar, while Bitcoin largely lagged behind that trend.

Cryptocurrency prices today: altcoins retreat alongside Bitcoin ahead of US jobs data

Other cryptocurrencies broadly declined in tandem with Bitcoin, giving up a large portion of their early-year gains.

Caution increased ahead of the release of US nonfarm payrolls data for December on Friday, which is widely expected to influence Federal Reserve rate expectations, amid growing bets that the central bank will keep interest rates unchanged in the near term.

Ether, the world’s second-largest cryptocurrency, fell 2.8% to $3,156.15, while XRP, one of this week’s stronger performers, dropped by 4%.

Oil prices rose on Thursday after two consecutive sessions of declines, as investors assessed developments related to Venezuela and reports of progress on proposed US legislation to impose sanctions on countries trading with Russia.

Brent crude futures climbed by 59 cents, or 0.98%, to $60.55 per barrel by 10:38 GMT, while US West Texas Intermediate crude rose 58 cents, or 1%, to $56.57 per barrel.

Tamas Varga, an analyst at PVM, said the price rebound was driven by President Donald Trump allowing the Russia sanctions bill to advance, raising concerns over further disruptions to Russian oil exports.

Republican Senator Lindsey Graham said on Wednesday that Trump had given the green light to the legislation, adding that the bill could be brought to a vote as early as next week.

Both benchmark crudes had fallen more than 1% for a second straight session on Wednesday, as market participants continued to price in ample global supply this year. Morgan Stanley analysts expect the oil market to face a surplus of up to 3 million barrels per day in the first half of 2026.

Data from the US Energy Information Administration showed on Wednesday that US gasoline and distillate inventories rose by more than expected in the week ended January 2, while crude oil inventories declined.

Washington announced on Tuesday that it had reached an agreement with Caracas granting access to Venezuelan oil worth up to $2 billion. Sources said the deal could initially require redirecting shipments that had been destined for China.

The sources added that independent Chinese refiners, which account for a significant share of China’s Venezuelan oil imports, may turn to Iranian crude to offset any potential shortfall.

In a related development, the United States seized two oil tankers linked to Venezuela in the Atlantic Ocean on Wednesday, one of which was flying a Russian flag, as part of an escalating effort by President Donald Trump to control oil flows in the Americas and pressure Venezuela’s socialist government to realign with Washington.

The US dollar remained on track to rise for a third consecutive session on Thursday, although mixed US economic data kept markets cautious ahead of the highly anticipated US nonfarm payrolls report due on Friday.

Data released on Thursday showed the US labor market appears stuck in a “no-hire, no-fire” phase, as job openings fell by more than expected in November while hiring slowed. At the same time, US services sector activity improved unexpectedly in December, suggesting the economy ended 2025 on relatively solid footing.

The dollar index, which measures the US currency against a basket of six major peers, rose 0.08% to 98.807, heading for a third straight daily gain. This comes after the dollar posted its worst annual performance since 2017, with analysts expecting continued downside pressure on the currency this year.

Jack Janasiewicz, chief portfolio strategist at Natixis, said the US economy still appears to be in relatively good shape, noting that a large portion of short dollar positions has already been built, which could limit further downside in the near term. He added that emerging market currencies may be among the relative beneficiaries compared with the euro or the Japanese yen.

Markets are currently pricing in at least two interest rate cuts by the Federal Reserve this year, even though the US central bank indicated in December that it may deliver only one cut in 2026. The Federal Reserve is widely expected to keep interest rates unchanged at its meeting later this month.

Geopolitical concerns following the US intervention in Venezuela were largely ignored by markets, with investors focusing primarily on economic data. However, potential risks remain that could weigh on the dollar if the US Supreme Court rules that some of the emergency tariffs imposed by President Donald Trump’s administration are unlawful, a development that could negatively affect the US currency.

Weak data weigh on the euro

In European markets, the euro came under pressure after inflation data pushed German bond yields to their lowest level in a month. The euro slipped 0.05% to $1.1670, after falling around 0.45% over the previous two sessions.

Analysts noted that market discussion has begun to cautiously shift toward the possibility of an interest rate hike by the European Central Bank in about a year. However, the return of headline inflation to target levels and easing core inflation make it difficult to justify the start of a tightening cycle in the near term.

Asian currency moves

The Japanese yen rose 0.05% to 156.70 per dollar, as traders refrained from taking large positions ahead of key upcoming economic data. Analysts said any strong yen gains would depend on an easing of tensions with China, warning that further escalation, such as a full ban on rare earth exports, could deal a heavy blow to the Japanese currency.

Meanwhile, the Australian dollar slipped to $0.6704, edging lower from a 15-month high reached earlier in the week, while the New Zealand dollar fell 0.13% to $0.5763.