The price of this metal could rise significantly

The demand for copper will grow strongly in the next ten years thanks to electric vehicles, energy infrastructure, artificial intelligence and automation, estimates trading house Trafigura.

The energy transition and new technologies such as artificial intelligence and automation have already improved the outlook for demand for the highly conductive metal.

In the next 10 years, it will be the source of at least 10 million metric tons of additional consumption, Trafigura calculated.

About a third of the new demand will be generated by the electric vehicle sector, notes Graeme Train, head of metals analysis at the Swiss company.

“That third includes electricity generation, transmission and distribution, and the rest will go to things like automation, industrial capital expenditures and data center cooling systems,” Train explained.

The rise of data centers is closely related to the development of artificial intelligence.

Demand for with copper will be stimulated by industrialization and urbanization in developing countries, especially in India, where consumption per inhabitant currently amounts to only half a kilogram, says the head of analysis at Trafigura. In China and developed economies, it is 10 and seven kilograms, he notes.

Accelerated production of electric vehicles, solar panels and grid investment in China and the recovery of Chinese industry have already boosted demand for copper, which is used mostly in the energy and construction industries.

These factors, combined with a tight supply of refined copper and copper concentrate, have pushed prices of the metal on the London Stock Exchange to the highest level in two years, close to $10,000 per ton.

Sources in the copper industry say that the rise in prices is partly due to the drop in stocks in warehouses registered on the LME, by as much as 35 percent compared to October last year, to 121,200 tons.

Adding to the price increase was the limited supply of copper concentrate following the closure of First Quantum’s Minerals-owned Cobra mine in Panama and mining giant Anglo American’s assessment of reduced production.

In such conditions, some analysts now expect a significant shortage on the market, of around 26 million tons this year.

(Poslovni.hr)