AI could add 1 million tonnes to copper demand by 2030 The above...

AI could add 1 million tonnes to copper demand by 2030

The above one million tonnes of copper is “on top of what we have as 4-5 million tonne deficit gap by 2030. That’s not something that anyone has actually factored into a lot of these supply and demand balances.”


Data Centres and Energy Transition End Markets
As a result of its electrical and thermal conductivity and its ductility, copper is an important metal in power-intensive data centres. Fiber optics may gain share in these applications, especially as data centre lane speeds increase, but the electrification of data centres will require a significant increase in grid capacity. Add to this the need for more electric power capacity for EVs and the shift to more renewable power (which requires more copper per MW than fossil fuel power), and we have new end markets for copper that are arguably in the midst of structural demand growth.
[Jefferies research report 13 March 2024]




Goldman Sachs on the link between AI data centre growth and copper Key linkage are the copper requirements tied to the data centres to support AI growth. We estimate that 1GW of data centre capacity required between 40-60kt. Estimates vary on planned additions but USA roughly planning to add ~8GW in 2024, 12 GW in 25 and 16GW in 2026, after 3GW in 2023. In copper volumes that means ~200kt of demand in 23' in the USA then as much 400-500kt in 24'. Using the NVDA assumption on AI demand growth for 2030 implies we could eventually be at a level where data centres require 2-2.5Mty of copper. This is just the USA-China will also look to expand data centres. Alongside green demand, this should underpin healthy USA copper demand growth this year and into mid-decade.

Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.