The chief economist at commodity trading giant Trafigura has warned that the copper market could become even tighter due to the impact of artificial intelligence.
Speech in the Financial Times merchandise Speaking at the summit in Switzerland, Trafigura chief economist Saad Rahim said there had been a “sudden explosion” in growth as a result of the proliferation of data centers worldwide.
Rahim said demand could increase by an additional 1 million tonnes by 2030, a figure that would “in any case amount to a shortage gap of 4-5 million tonnes by 2030”.
He added: “No one has really considered much of the balance between supply and demand.”
Rahim’s concerns about AI and its dredging of resources are echoed by others.
According to a recent study from the University of Washington, the hundreds of millions of queries logged on Open AI’s platform require the energy equivalent of 33,000 U.S. homes, or about 1 gigawatt-hour per day.
Meanwhile, copper rose to an all-time high point Last week it hit nearly $9,400 (£7,444) for the first time in more than a year, despite persistent concerns about the state of the global economy.
The energy transition is driving demand for copper as a key component in electric vehicles and renewable energy technologies.
Additionally, the prospect of lower interest rates spurring global manufacturing, where copper is a key raw material, and China’s long-awaited awakening of its real estate industry also point to a growing need for the red metal. .
But China, which is also the third-largest producer of copper from mines, has threatened to cut production as it struggles to maintain regular supplies of the raw material.s. This problem is felt in projects in other countries as well.
Panmure Gordon analyst Kieron Hodgson said in a note distributed this week that China’s production cuts “change the narrative for everyone”, “significantly tighten” the global copper market and push prices higher. He said he would.
By city AM
