Supply gap looming

AI revolution causes a big run on copper ore

A miner inspects ore to be transported away (symbolic image)(Bild: Michael Evans - stock.adobe.com)

The increasing use of artificial intelligence and the associated need for ever larger data centers is driving up demand for copper, according to commodities trader Trafigura. By 2030, demand could increase by up to one million tons and exceed supply.

The energy transition is also increasing demand, said Trafigura chief economist Saad Rahim at an event organized by the Financial Times in Lausanne. At the same time, supply will not be able to meet demand. The additional one million tons for AI applications comes on top of the supply gap of four to five million tons that is expected in 2030 anyway.

Global demand for copper is expected to be around 26 million tons this year. China is the world's largest producer and consumer of the metal. The country also dominates a number of other industrial metals that are needed for the energy transition.

This is causing uncertainty in the industry: "My concern is that rising geopolitical tensions are slowing down the energy transition," said Beata Javorcik, Chief Economist at the European Bank for Reconstruction and Development. After all, the West only has comparatively small stocks of rare earths, for example.