At the Aurubis AG headquarters in Hamburg, Germany, an employee scans a bar code on a stack of copper bars stacked outside.
Christian Bossi | Bloomberg | Getty Images
Copper futures hit a record high on Wednesday as demand for the base metal remained strong amid a data center construction boom and continued electrification of the global economy.
NYMEX copper prices hit $5.02 per pound, according to FactSet. The metal is up more than 25% so far this year.
Copper demand is widely considered an indicator of economic health, with the metal key to the energy transition ecosystem. It is integral to manufacturing electric vehicles, power grids and wind turbines, especially as the global economy electrifies.
According to Bank of America’s forecast, overall copper demand from the electric vehicle and transportation industries will grow by about 5% this year.
Copper is also a key material in the cables used in data centers, and its growth has spurred demand for the red metal, especially as the artificial intelligence boom creates more demand for data centers.
“While demand for electric vehicles is still growing, albeit at a slower pace, the focus has shifted to copper for data center expansion,” the Bank of America report added.
Data centers rely on copper Suitable for various electrical applications – electrical connectors, busbars, power cables.this The International Energy Agency predicts Data center power demand will more than double from 460 TWh in 2022 to over 1,000 TWh in 2026.
this International Copper Study Group (ICSG) The company slashed its forecast for a metal supply glut this year as mine output fell short of expectations.
The 2024 copper production growth forecast has been reduced to 0.5%, compared with the 3.7% growth forecast by the ICSG in October last year.
Last November, First Quantum Minerals halted production at Cobre Panamá, one of the world’s largest copper mines. According to the Supreme Court’s decision and nationwide protests over environmental issues. Anglo American plc, a major producer, Says it will cut copper production In 2024 and 2025, it seeks to cut costs.
“We expect copper prices to climb towards $10,500/ton in the near term as expected signs of real tightening will extend the upward momentum seen in recent months,” Citi wrote in a note. The three-month copper contract traded at $10,185.5/ton. Dollar london metal exchange.
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