The global demand for copper, fueled by the rise of artificial intelligence (AI) and data centers, is projected to increase by one million metric tons by 2030, further straining the already tight supply, according to commodity trading giant Trafigura.
This demand surge is part of a broader energy transition toward greener technologies such as electric vehicles and renewable energy sources, aimed at reducing carbon emissions worldwide.
Saad Rahim, Trafigura’s chief economist, highlighted at the Financial Times Global Commodities Summit in Lausanne, the unexpected growth in demand originating from data centers and AI technologies.
Rahim emphasized that this additional demand would exacerbate the anticipated four to five million ton deficit in the copper market by 2030, a factor not yet considered in many supply and demand forecasts.
Although Rahim did not specify the expected global demand for copper by 2030, it stands at approximately 26 million tons for the current year.
A Reuters survey from January anticipates the copper market deficit will widen to over 100,000 tons by 2025, up from this year’s 35,000 tons, underscoring the challenges in meeting the burgeoning demand.
China’s pivotal role as the leading producer and consumer of copper, along with its dominance in the supply of various industrial metals crucial for energy transition, poses concerns for Western countries aiming to achieve net zero emissions targets.
The geopolitical landscape further complicates the situation, with Beata Javorcik, chief economist at the European Bank for Reconstruction and Development, expressing worries that increasing geopolitical tensions could hinder the green transition.
She noted China’s significant control over the production of essential raw materials, such as rare earths and graphite, vital for electric vehicle batteries, compared to the West’s relatively minor share.
Javorcik’s comments underscore the intricate balance between meeting global copper demand for future technologies and navigating the geopolitical and supply chain challenges that accompany it.