AI developments could worsen copper shortage: demand to grow to 52.5 million tons by 2050
The development of artificial intelligence increases the demand for copper, which may lead to a shortage. By 2050, AI data centers will consume up to 7% of the world's copper. Copper demand may increase to 52.5 million tons, which will increase pressure on prices.
The rise of artificial intelligence and related technologies could worsen the copper shortage. AI-powered data centers are expected to consume 6-7% of global copper demand by 2050, up significantly from less than 1% today. This could push global copper demand from 30.4 million tonnes in 2021 to 52.5 million tonnes by mid-century.
Copper inventories have fallen to record levels in recent years, and new projects are not opening fast enough to meet future demand. Copper prices hit a record high in May, but the economic downturn in China temporarily pushed prices down to $9,207 per tonne. Some analysts predict prices could rise to $40,000 per tonne due to the expected shortage.
The industry is looking to boost production through mergers and acquisitions to meet growing demand. Copper demand is expected to increase significantly by 2026, with up to 28 gigawatts of additional data center capacity needed. Bank of America forecasts copper prices to rise to $5.44 per pound, up 27% from current levels.
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