Copper Poised as the “New Oil” as Western Grids Lag Behind China, Goldman Sachs Warns

Goldman Sachs cautions that aging power grids in Western economies have become a critical vulnerability for energy security amid soaring AI demand and heightened geopolitical tensions, and that urgent grid upgrades will drive copper prices to $10,750 per tonne by 2027. Analysts Lina Thomas and Daan Struyven note that European transmission systems average 50 years of service life while North American grids average 40 years, both approaching the limits of their designed operational lifespans. By contrast, China’s rapid roll-out of ultra-high-voltage transmission infrastructure has produced one of the world’s most advanced power networks.

The report argues that the electricity grid now occupies a central role at the intersection of AI deployment and national defence needs, creating mutual dependencies that elevate grid modernisation from an infrastructure priority to a strategic security imperative. Rising power demand from data centres and AI compute installations is already amplifying stress on regional systems, with significant transmission constraints recorded in markets such as PJM in Virginia during 2022, and nine of the United States’ thirteen regional power markets reaching critical stress levels over the most recent summer. Goldman Sachs projects that by 2030 all but one U.S. regional power market will hit critical stress thresholds, underscoring the urgency of capacity and transmission investment.

Grid modernisation is highly metal‑intensive, and copper stands out as a core input whose strategic importance is intensifying. Goldman Sachs estimates that cumulative grid and power‑infrastructure buildout through 2030 will account for roughly 60% of global growth in copper demand, an increment comparable to adding another United States‑sized consumption bloc. This demand profile underpins the bank’s maintained target of $10,750 per tonne for copper in 2027, a forecast born of the view that AI and defence imperatives position the grid at the heart of future energy security and commodity demand dynamics.