Highlights

  • Shanghai Metals Market used its inaugural Australian seminar in Sydney to outline a shifting balance between aluminium and copper in electricity networks.
  • SMM expects aluminium to gain ground in towers, transformers and distribution cables, while copper retains its hold on ultra-high-voltage lines.
  • Artificial intelligence data centres are emerging as a fast-growing source of Demand for both metals, with copper price levels shaping substitution.

Electrification has become a defining theme for Australia's resources sector, with copper and aluminium both central to the build-out of power grids, renewable generation and digital infrastructure. That makes the relative demand outlook for the pair a key consideration for Market Participants tracking Metal and Mining Stocks on the ASX. The debate was brought into sharp focus in Sydney when Shanghai Metals Market, a Chinese price-reporting and research organisation widely known as SMM, hosted its inaugural Australian metals and mining seminar since opening a local office. Held ahead of the IMARC conference, the event heard that aluminium is steadily encroaching on territory long dominated by copper, even as surging data centre construction creates fresh demand for both metals.

SMM Brings Its Metals Outlook to Sydney

SMM's Australian metals and mining seminar took place at the Sydney Masonic Centre in late October, drawing miners, smelters, processors, research houses and financial organisations. Its timing, just before IMARC opened at the International Convention Centre, placed it at the heart of a busy week for the Australian resources community.

The keynote address was delivered by Allen Cui, Consulting Director at SMM, under the theme of copper and aluminium powering the grid and the data centre. His presentation set out SMM's forecasts for how the competing metals will be used across electricity networks and computing infrastructure over the coming years.

Where Aluminium Is Gaining Ground

According to SMM, aluminium consumption in power grids is forecast to grow steadily through the end of the decade, while copper use in the same segment is projected to contract. Mr Cui said aluminium is expected to overtake copper as the largest metal used per kilometre of grid during the next decade.

Several applications are driving the shift. High-strength aluminium alloy transmission towers are lighter and require less bracing. Aluminium-wound transformers are easier to transport and install, and are replacing copper units in medium and low-voltage settings. Aluminium cables, meanwhile, offer a favourable strength-to-weight ratio and lower cost for medium and low-voltage distribution networks.

Copper is not being displaced everywhere. SMM noted that it remains dominant in ultra-high-voltage transmission, including the most powerful transformer classes, where its superior conductivity remains difficult to replace.

Data Centres Add a New Layer of Demand

The rapid expansion of artificial intelligence computing is creating a separate demand stream. SMM expects copper consumption from AI data centres to rise steeply over the rest of the decade, reflecting the metal's role in power distribution, cooling and chip-level connections.

Aluminium intensity in these facilities is also forecast to increase, largely through power systems. Even so, Mr Cui noted that data centre aluminium demand still represents only a small fraction of the global aluminium market, although it ranks among the fastest-growing segments SMM tracks.

He summarised the dynamic by saying that aluminium wins in the middle of the system while copper holds both ends, namely the cold plate and the chip.

Price as the Swing Factor

A recurring theme of the presentation was that substitution depends heavily on relative pricing. Mr Cui observed that the higher the copper price climbs, the more engineering effort will be directed towards aluminium alternatives. That dynamic suggests elevated copper prices may, over time, encourage demand to migrate where technical requirements allow.

For producers, this creates a nuanced outlook. Strong copper prices support margins and project economics, yet they may also accelerate design changes that reduce copper intensity in parts of the grid. Aluminium producers, in turn, could benefit from wider adoption, although their competitiveness is closely tied to energy costs.

Implications for Australia's Resources Sector

Australia is a significant supplier of both copper and the bauxite and alumina that feed the aluminium value chain, so shifts in end-use demand carry relevance across the local sector. The forecasts presented in Sydney point to a market where both metals benefit from electrification, but where their shares of specific applications may evolve.

These projections represent SMM's own forecasts rather than settled outcomes, and they remain sensitive to technology choices, grid spending decisions, energy prices and policy settings in major economies. Market participants will continue to weigh such outlooks alongside actual consumption data as the energy transition unfolds.

A Competitive but Complementary Relationship

SMM's Sydney seminar framed copper and aluminium less as outright rivals and more as metals competing for specific roles within a rapidly expanding electrified economy. Aluminium appears positioned to gain in towers, transformers and distribution cables, while copper retains its strength in ultra-high-voltage transmission and the most demanding data centre components. For the Australian market, where both Supply chains are well represented, the discussion highlights how technology, pricing and infrastructure spending will shape demand patterns across the broader metals and mining landscape.