What Impact Will AI Have on Future Copper Markets?
Unveiling the Impending Surge: AI's Impact on Copper Demand

Artificial Intelligence (AI) is poised to revolutionize various industries, and its impact is extending to commodities markets as well. One such commodity is copper, which is expected to see a significant increase in demand by 2030 due to the proliferation of AI technologies. This article explores insights from Trafigura's chief economist, Saad Rahim, regarding the potential surge in copper demand driven by AI.
Insights from Trafigura's Chief Economist
During the Financial Times Commodities Global Summit in Switzerland, Saad Rahim highlighted the transformative effect of AI on copper demand. He emphasized that the growth in demand, spurred by the AI boom, could add an additional 1 million tonnes per annum (Mtpa) to copper demand by 2030. This projection adds to the existing supply-demand gap, potentially leading to higher prices in the copper market.
Factors Driving Copper Demand
The surge in copper demand can be attributed to several factors, with the growth of data centers being a primary driver. Data centers, essential for storing and processing vast amounts of information, rely heavily on copper for various electrical applications. Additionally, the expansion of AI applications, which require efficient and reliable electrical infrastructure, further fuels the demand for copper.
Copper's Role in Electrical Infrastructure
Copper's unique properties make it indispensable for electricity transmission and distribution. Its superior conductivity maximizes efficiency, while its ductility and malleability allow for the shaping of intricate system components. These qualities make copper an ideal material for powering data centers and supporting AI-driven technologies.
Prevalence of Copper in Data Centers
Data centers have long relied on copper for a wide range of applications, including power cables, busbars, connectors, heat exchangers, and cooling systems. The increasing capacity and number of data centers worldwide translate to a substantial rise in copper consumption. For example, Microsoft's data center in Chicago required thousands of tonnes of copper for its construction, illustrating the significant demand scale.
Case Study: Microsoft's Data Center
Microsoft's investment in data center infrastructure exemplifies the substantial quantity of copper required for such projects. The construction of a $500 million data center in Chicago necessitated over 2,000 tonnes of copper. This case study underscores the significant role of copper in supporting the growth of data centers and AI technologies. Market Projections for Data Center Infrastructure
The North American data center infrastructure market is poised for remarkable growth, with projections indicating a substantial increase in market size by 2030 and 2040. This growth trajectory corresponds to a rising demand for copper, as data center expansion drives the need for reliable and efficient electrical infrastructure. Estimates suggest a steady increase in copper consumption for data centers over the coming decades.
Conclusion
The convergence of AI technologies and the growth of data centers is expected to significantly impact copper demand in the coming years. Insights from Trafigura's chief economist highlight the potential for a substantial increase in copper demand by 2030, driven by the AI boom. As industries increasingly rely on data-driven technologies, the demand for copper as a critical component of electrical infrastructure is likely to surge, presenting both challenges and opportunities for the copper industry.
