Trafigura, a leading commodity trader, forecasts that demand for copper linked to artificial intelligence (AI) and data centers could increase by up to one million metric tons by 2030. This anticipated growth in copper consumption, driven by the expanding use of AI technologies, is poised to exacerbate supply deficits towards the end of the decade, according to Saad Rahim, Trafigura’s chief economist.
The ongoing energy transition, characterized by the adoption of electric vehicles and renewable energy solutions, is expected to significantly boost copper demand in the years ahead as global efforts intensify to reduce carbon emissions.
Rahim highlighted the rapid growth in demand from data centers and AI-related applications, emphasizing that the additional one million tons would compound the existing four to five million ton deficit projected for 2030. This surge in demand has not been fully factored into current supply and demand assessments.
While specific figures for global copper demand in 2030 were not provided, this year’s demand is estimated at around 26 million tons. A Reuters survey earlier this year indicated an anticipated copper market deficit exceeding 100,000 tons by 2025, compared to a shortage of 35,000 tons in the current year.
China’s significant role as both the largest producer and consumer of copper raises concerns among western nations striving to achieve net zero targets. The concentration of global supplies of critical raw materials for the energy transition in China, such as rare earths and graphite essential for electric vehicle batteries, poses challenges for Western countries and their allies.
Beata Javorcik, chief economist at the European Bank for Reconstruction and Development, expressed apprehension over geopolitical tensions potentially hindering the green transition, given China’s dominance in key raw material production compared to Western nations.