Raw materials

Copper, a promising commodity thanks to artificial intelligence

Posted by MoneyController on 11.04.2024

What are the price prospects for copper? Its use in a particularly promising technology sector could boost prices over the next few years.

Copper and artificial intelligence

Copper is a metal with many industrial uses, and its demand as a raw material has increased as it is used in the construction of technologies linked to the energy transition. As Sissi Bellomo writes in 'Sole 24 Ore', to these uses of copper could be added those linked to the artificial intelligence sector: this use could push up the price of the metal considerably.

Some predictions for copper shortages by 2030

Bellomo mentions the predictions of Saad Rahim, chief economist at Trafigura (a company involved in international commodities trading): the growth in demand for copper could increase to such an extent that by 2030 there could be a shortage of around 4-5 million tonnes of copper. These forecasts are very similar to those of JP Morgan, which predicts a demand shortfall of around 4 million tonnes in 2030.

Copper price and futures rising

The price of copper has risen in recent months: the price has exceeded $9,500 per tonne and futures are up 18% in the last six months. As Bellomo writes, reporting on a reflection by Citi analysts, speculation seems to be driving the copper price today, but soon (confirming what has been reported so far) support for the price could come from structural phenomena: Citi cites applications in energy transition and artificial intelligence-related infrastructure as key.

The copper price: short-term outlook

Citi's price forecasts - as we read in Bellomo's article - are that copper could reach a steady $10,000 per tonne by the end of this year, and $12,000 by 2026. The biggest risk, Citi concludes, is for manufacturers of technology products (from cars to energy) that require extensive use of copper: their costs could rise significantly.

Read also:

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