Trafigura, a leading commodity trader, has cautioned that rising demand for copper linked to artificial intelligence (AI) and data centres could exacerbate supply deficits towards the end of the decade. According to the company, this increased demand could add up to one million metric tons by 2030, significantly impacting global copper markets.
Trafigura's Chief Economist Highlighted the Explosive Growth in Demand
Saad Rahim, Trafigura's chief economist, highlighted the explosive growth in demand driven by data centres and AI technologies. He emphasized that this additional demand is not adequately factored into current supply and demand forecasts, potentially leading to a significant supply gap by 2030.
Rahim did not provide specific projections for global copper demand in 2030. However, current estimates suggest global copper demand will reach around 26 million tons in 2024, with a growing deficit expected in the coming years.
A Reuters survey earlier this year indicated that the copper
market deficit could surpass 100,000 tons by 2025, up from 35,000 tons in 2024.
Demand Surges Due to Technological Advancements
China's dominance in both copper production and consumption raises concerns among Western leaders aiming for net-zero targets. Beata Javorcik, chief economist at the European Bank for Reconstruction and Development, expressed apprehension about geopolitical tensions affecting the green transition.
She highlighted China's control over critical raw materials like rare earths and graphite, essential for electric vehicle batteries, as potential bottlenecks for Western countries.
The warnings from Trafigura underscore the urgent need for
strategic planning and investment to address potential supply shortfalls in the
copper market, particularly as demand surges due to technological advancements
in AI and data infrastructure.
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