AI may not be writing this article, but it could give a major boost to copper demand
\nBloomberg predicts US copper demand could lift 1.1-2.4Mt by 2030 from the needs of AI data centres
\nMetals stocks sink on \u2026 er \u2026 copper and gold prices<\/p>\n
I couldn\u2019t be AI \u2026 or could I?<\/p>\n
I\u2019m not, I promise, but there\u2019s certainly enough scepticism going around with the pace at which the technology has been reinventing itself.<\/p>\n
We\u2019re sceptical as well that it\u2019ll hit all the right notes when it comes to replicating the freewheeling business comedy of our surprisingly real Lunch Wrap doyen Gregor Stronach, but plenty of fields will be incorporating the next technological wave in several forms in the years to come.<\/p>\n
Even if Nvidia investors are taking money off the table, rising AI use will mean, ironically, a run in raw materials consumption.<\/p>\n
In places like North America, once a growing manufacturing powerhouse, copper demand actually reduced early this century.<\/p>\n
AI could finally bring growth back to a market superseded as the copper industry\u2019s bedrock by China.<\/p>\n
According to research from Bloomberg Intelligence\u2019s led by Global Head of Metals and Mining Grant Sporre and senior analyst Rob Barnett, global copper consumption will rise by 2Mt by 2030, with over half coming from the US.<\/p>\n
Underpinning that is an expected aggressive growth in \u201cpower-hungry\u201d AI data centres.<\/p>\n
\u201cPowering data centres via copper-intensive renewables and reshored manufacturing is set to spur US needs (stagnant for a decade), lifting worldwide demand to above-trend 2.7-3% annual growth,\u201d Sporre and Barnett said in a note last week.<\/p>\n
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While BI says North American copper demand fell more than 5% a year from 2000-2010, reflecting a manufacturing shift to China, trade frictions, tariffs and technological change is expected to shift this momentum in the decade ahead.<\/p>\n
\u201cRapid growth in generative AI spending \u2014 driving the build-out of data centres \u2014 could spur a 3% annual increase in North American copper growth to 2035, based on analysis by BI\u2019s telecoms, utilities and global technology teams,\u201d Sporre and Barnett said.<\/p>\n
\u201cInvestment in manufacturing, as part of reshoring and upgrade to aging infrastructure, has the scope to lift US and North American demand 2-2.5%, with further upside of 0.5% from AI capacity development.<\/p>\n
\u201cConsumption is likely to significantly outpace 2010-20\u2019s anemic 0.4% compound annual growth, and 5%-plus decline over 2000-10.\u201d<\/p>\n
By 2030, data centres could add 1.1-2.4Mt of demand on the basis that each MW of power draw requires 27-33t of the red metal \u2013 between US$260,000 and US$315,000 worth.<\/p>\n
\u201cA study based on Microsoft\u2019s $500 million data center in Chicago puts the copper intensity of a 1 MW facility at 27 metric tons,\u201d Sporre and Barnett said.<\/p>\n
\u201cYet as AI demands mount, so too will server-rack power density and cooling needs, potentially pushing up copper intensity too. An earlier study by Schneider Electric derived copper intensity of 66 tons a MW, yet this was based over a 10-year life cycle, with subsequent refit demand likely to be met by recycling.\u201d<\/p>\n
AI projections have added a layer of complexity to copper growth forecasts and could restructure the demand base, with tech heavy societies like the USA grabbing a larger share of the end user market.<\/p>\n
That\u2019s good for copper miners, though they require prices substantially higher than current ~US$9600\/t rates \u2013 strong otherwise from an historical perspective \u2013 to justify starting new capital intensive operations.<\/p>\n
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The materials sector was down 0.58% and while everyone may be excited for the future of copper, weak Chinese economic data and hawkish US Fed rates talk.<\/p>\n
Gold fell overnight, sending Aussie producers down, with copper and most base metals also in reverse.<\/p>\n
\u201cMuch of the weakness is due to the property market. Local governments earned CNY227.4bn from selling land in May, down from CNY238.9bn in April and remaining at the lowest level since May 2016,\u201d ANZ\u2019s Kishti Sen, Brian Martin and Daniel Hynes said.<\/p>\n
\u201cCopper have back those earlier gains on the broader risk-off tone across markets. The red metal has been under pressure in recent days following weak economic data.<\/p>\n
\u201cThe global outlook for manufacturing remains poor after flash PMIs in Europe and the US. This has been compounded by rising inventories for metals such as aluminium, copper and nickel.<\/p>\n
\u201cThe slump in prices and demand in the nickel market was highlighted by Eramet and BASF abandoning plans to spend USD2.6bn on a nickel-cobalt plant in Indonesia.\u201d<\/p>\n
Those conditions were felt hard by ASX copper miners. 29Metals (ASX:29M)<\/strong><\/a> was struck with a near 9% drop.<\/p>\n Lithium stocks were on the up, with Citi saying in a note that despite short-term headwinds, they expect to see chemical prices (~US$13,000\/t) improve to US$18,000-20,000\/t in 2025 as the physical market rebalances in favour of producers.<\/p>\n \u00a0<\/p>\n WA1 Resources (ASX:WA1)<\/strong><\/a><\/strong> (niobium\/REE) +6.7%<\/p>\n Liontown Resources (ASX:LTR)<\/strong><\/a> (lithium) +3.3%<\/p>\n IGO (ASX:IGO)<\/strong><\/a> (lithium\/nickel)\u00a0 +3%<\/p>\n Pilbara Minerals (ASX:PLS)<\/strong><\/a> (lithium) +2.5%<\/p>\n \u00a0<\/p>\n 29Metals (ASX:29M)<\/strong><\/a> (copper) -8.9%<\/p>\n Resolute Mining (ASX:RSG)<\/strong><\/a><\/strong> (gold) -5.5%<\/p>\n Capricorn Metals (ASX:CMM)<\/strong><\/a> (gold) -4.9%<\/p>\n Alumina (ASX:AWC)<\/strong><\/a> (alumina) -4.6%<\/p>\n The post Monsters of Rock: I could be AI, but the copper behind the screen can\u2019t<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Today\u2019s Best Miners <\/strong><\/strong><\/h2>\n
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