Recently, international copper prices have strengthened once again. As of September 17, the London copper futures contract continued to rise by 0.07%, reaching $9,379 per ton, and has rebounded to recent high points.

This week marks the "Super Central Bank Week" globally, with the Federal Reserve set to announce its interest rate decision on September 19 (Thursday). This could potentially be the first rate cut since 2020. If a long-anticipated rate-cutting cycle begins, lower financing costs will reduce copper inventories, and the demand to replenish these stocks could support copper prices.

On the other hand, institutions and mining giants frequently predicting higher "copper prices" have also stirred activity in the commodity markets.

Data Source: Trading Economics

AI  Driving Copper Prices Up

Recently, BHP (BHP.US) has warned that with the advancement of artificial intelligence, copper demand is expected to surge rapidly in a few years, leading to a more pronounced copper shortage and consequently, a sharp increase in copper prices.

BHP’s Chief Financial Officer, Vandita Pant, stated that by 2050, the rise of data centers and artificial intelligence could increase global copper demand by 3.4 million tons annually, as these technological advancements require more energy-intensive computing.

As the world’s largest mining company by market value, BHP projects that global copper demand will grow from 30.4 million tons in 2021 to 52.5 million tons annually by 2050, marking a 72% increase.

In fact, the development of AI relies heavily on substantial computing power, with data centers, as the core "heart," expected to increase rapidly. Copper is extensively used in data center power transmission (such as cables, connectors, and busbars), as well as in heat exchangers, water tanks, grounding and interconnection, and HVAC systems.

Additionally, NVIDIA (NVDA.US) introduced the GB200 NVL72 this year as a new supercomputing system for data centers. This product incorporates "copper high-speed interconnect" technology in its connections, enhancing efficiency and stability while significantly reducing system complexity and costs.

Copper Widely Used in Clean Energy Transition

Copper is a key material for achieving net-zero emissions and is widely applied in electricity, electric vehicles, and renewable energy sectors. As the energy intensity of artificial intelligence technology increases, demand for copper will further intensify. However, some analysts caution that long-term forecasts for copper demand in data centers have considerable uncertainties, as the future development path of this market remains unclear and unpredictable.

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