Lausanne, April 8 – Demand for copper linked to artificial intelligence (AI) and data centers could reach one million metric tons by 2030, doubling the current level. This could lead to even larger supply deficits, putting upward pressure on prices for this key commodity.
The growing popularity of AI and cloud services is expected to lead to a sharp increase in the number of data centers. These facilities consume significant amounts of copper in cables, cooling systems, and other components.
“If you look at the demand coming from data centers and related to AI, that growth has just exploded,” said Saad Rahim, chief economist at Trafigura, a Swiss-based commodity trading company. “By 2030, that could represent additional copper demand of up to one million tons.”
China as a Dominant Player
China is the world’s largest producer and consumer of copper and has a dominant position in the supply of many other industrial metals needed for the energy transition. This raises concerns for Western countries that are trying to meet climate goals.
“I’m afraid that the escalation of geopolitical tensions will slow down the green transition,” said Beata Javorčíková, chief economist at 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.”
Impacts on Prices and the Environment
Increased demand for copper could lead to higher prices for this commodity, which could impact various sectors of the economy. In addition, copper mining can have a negative impact on the environment, including air and water pollution.
To address these challenges, it will be necessary to invest in new mining capacity and in technologies that reduce copper consumption and its environmental impact. At the same time, it is important for Western countries to diversify their supply chains and reduce their dependence on China.
Conclusion
Artificial intelligence and data centers represent a significant trend that will have a major impact on the copper market in the coming years. Increased demand for this commodity could lead to higher prices and negative environmental impacts. Addressing these challenges will require close cooperation between governments, industry, and non-governmental organizations.sharemore_vert
Key bullet points of the article:
Copper Demand:
- Copper demand is expected to double to 36 million tons by 2030.
- The increased demand is driven by the growth of artificial intelligence (AI) and data centers.
- These facilities consume significant amounts of copper in cables, cooling systems, and other components.
Copper Supply:
- A copper supply deficit is expected in the coming years.
- China is a dominant producer and consumer of copper, raising concerns about Western dependence.
Impacts:
- Higher copper prices could impact various sectors of the economy.
- Copper mining can have negative environmental impacts.
