Copper demand linked to artificial intelligence and data centers could add up to one million metric tons by 2030 and exacerbate supply shortfalls by the end of the decadeaccording to commodities trader Trafigura.
It is expected that the energy transition, which includes electric vehicles and renewable energy technologiesdrive increased copper consumption in the coming years as the world moves towards eliminating carbon emissions.
“If you look at demand from data centers and demand related to artificial intelligence, growth has suddenly skyrocketed,” said Saad Rahim, chief economist at Switzerland-based Trafigura, at the Financial Times Global Commodities Summit in Lausanne.
The million tons “It adds to the deficit gap of four to five million tonnes by 2030,” Rahim said. “That’s not something that anyone has taken into account in many of these supply and demand balances.” Rahim did not specify what global demand for copper will be in 2030.
The market expects global copper demand to be around 26 million tonnes this year, while a Reuters poll published in January showed expectations are for the copper market deficit to rise above 100,000 tonnes. in 2025 from a shortage of 35,000 tonnes this year.
China is the world’s largest producer and consumer of copper. It also dominates the global supply of many other industrial metals needed for the energy transition – a source of concern for Western leaders who must meet net-zero emissions targets.
“My fear is that the escalation of geopolitical tensions will slow down the ecological transition,” says Beata Javorcik, chief economist of the European Bank for Reconstruction and Development. “China controls a large share of the production of critical raw materials, while the West and its allies control a relatively small share of some of those critical raw materials.”
Javorcik mentioned rare earths and graphite needed for electric vehicle batteries as materials whose production is dominated by China.
Copper price and Citi estimates
Three-month copper on the London Metal Exchange (LME) rose 0.6% this Monday to $9,384 per metric ton, after reaching the $9,450, a maximum not seen since January of last year.
In this context, Citi said this Monday that revised upward its price estimate for copper from zero to three months, to a value of $9,700 a ton from a previous projection of $9,200.
Furthermore, in his base case, he sees the metal in an upward trend to average $10,000 a ton by the fourth quarter of this year and $12,000 a ton in 2026. “Our base case of $12,000 a ton assumes only a small increase in cyclical demand growth over the course of 2025 and 2026”he assured.
Copper prices hit their highest level in more than 14 months in London on Mondayfavored by demand from trend-following funds, good German industrial data and the rebound in other raw materials.
By Pratima Desai, Reuters agency
Source: Ambito
