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AI and data centres to drive up to one million tonnes surge in copper demand

Written by Tue 9 Apr 2024

Commodity trader, Trafigura, has predicted that copper demand, driven by artificial intelligence (AI) and data centres, could increase by up to one million metric tonnes by 2030, potentially worsening supply deficits by the decade’s end.

Reuters reported this energy transition is expected to drive a significant increase in copper consumption as the world progresses towards carbon emissions reduction.

Chief Economist at Trafigura, Saad Rahim, said the copper demand stemming from data centres and AI has experienced a sudden and substantial surge in growth. Rahim added the projected one million ton increase adds to an existing deficit gap of four to five million tonnes expected by 2030.

“That is not something that anyone has actually factored into a lot of these supply and demand balances,” said Rahim

Rahim did not predict what the global copper demand is expected to look like in 2030.

Global copper demand is projected to hit 26 million tonnes in 2024. According to a Reuters survey, the copper market deficit is forecasted to exceed 100,000 tonnes in 2025, compared to 35,000 tonnes this year.

China Leads the Pack in Copper Production

China leads globally as both the largest producer and consumer of copper, securing the top position in the supply chain for industrial metals crucial for the energy transition.

Chief Economist at the European Bank for Reconstruction and Development, Beata Javorcik, expressed concern that the escalation of geopolitical tensions will slow down the green energy transition.

“China controls a large share of production of critical raw materials while the West and its allies control a relatively small share in some of those critical raw materials,” said Javorcik.

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Written by Tue 9 Apr 2024

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