Macquarie, the Australian bank, says recycling needs higher prices and more government support to ease the next copper shortage.
The market is expected to decline to a surplus of 3 mmTpy by 2030 as demand increases due to advancing electrification and primary production is constrained due to underinvestment.
About 9 tonnes of copper is recovered each year, compared with current demand of 31 million tonnes a year.
Commodity experts have been warning about copper shortages for years.
BloombergNEF estimates demand will increase by more than 50 percent from 2022 to 2040.
"Copper is commonly used as a building metal for building wiring, mechanical wiring, etc., but if we look at the trend of decarbonized net-zero energy transition, copper is the new oil," Al Chu, who manages the Natural Resources Fund at the University of New York Mellon, told CNBC.
Copper has the longest history of recycling of any material. It is estimated that two-thirds of the 690 million tons of copper produced over the past hundred years is still in production.
On average, more than 30 percent of copper products are recycled, according to the copper Alliance.
The energy consumption of recycled copper is 85% lower than that of raw copper.
