"The world is already producing less copper than it consumes. The artificial-intelligence boom could worsen that supply-demand imbalance, pushing prices higher.
"We're adding even more sources of demand," Saad Rahim, chief economist at Trafigura, a Swiss commodity trading giant, told a conference Monday.
"First it was the energy transition, now also data centers and AI. That growth has suddenly exploded," said Rahim, speaking on a panel at the FT's Commodities Global Summit in Lausanne, Switzerland.
Copper is an efficient conductor of electricity and a key ingredient in power plants and data centers. A dearth of new mining has led to concerns about insufficient supplies. Last year the refined copper market saw a deficit of 27,000 metric tons, according to the International Copper Study Group.
AI could add another million tons of copper demand, Rahim said. "There are some real risks around that."
Copper futures finished Friday at about $4.24 a pound, the second-highest settle of the year, representing a more than 9% gain in 2024." [1]
1. AI Boom Stands to Boost Copper Prices. Hirtenstein, Anna. Wall Street Journal, Eastern edition; New York, N.Y.. 09 Apr 2024: B.2.
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