Technology & AI Influence

AI's Impact on Copper Demand

 

2024-04-10: Saad Rahim, the Chief Economist, at Trafigura, a commodity trading company recently highlighted the impact of artificial intelligence on the demand for copper. During his speech at the Financial Times Commodities Summit in Switzerland Rahim discussed the growth driven by the proliferation of data centers. He projected a demand for an additional one million tons of copper by 2030 on top of a forecasted deficit of four to five million tons.

 

Rahim emphasized that the consequences of this increased demand due to AIs expansion have not been fully considered in analyses of copper supply and demand. The rising energy consumption by AI platforms as evidenced by studies exacerbates these concerns.

 

Despite prevailing uncertainties copper prices reached a high last week due to rising demands for electric vehicles and renewable energy solutions. Factors like interest rates and the expected recovery of Chinas property market are further boosting the demand for copper.

 

However, analysts caution that any potential decrease in Chinas copper production could have an impact, on the supply chain.