Copper Nears Record Highs Amid Surging Demand

Copper Nears Record Highs Amid Surging Demand
Copper prices are approaching record highs as demand driven by renewable energy, electric vehicles, and artificial intelligence continues to grow. Year-to-date, copper prices have surged by 29%, with futures reaching $5 per pound as of May 15, the highest level since March 2022 when prices hit an all-time high.
As the largest copper importer, China's role is pivotal in the copper supply chain. In March, Chinese copper smelters agreed to cut production by 5% to 10% due to declining treatment charges, driving prices above $4 per pound. The US dollar's decline further pushed prices to a 14-month high of $4.2 per pound in early April.
The global shift towards renewable energy, electric vehicles, and AI has strengthened copper's demand outlook. Analysts forecast that copper demand will double to 50 million metric tons by 2035, driven by the US, China, Europe, and India. 
In 2023, global copper mine production was around 22 million metric tons, up from 16 million metric tons in 2010. Despite projected actual growth to 30 million metric tons by 2036, this will not meet the anticipated demand surge.
What Does This Mean for Me?
The AI boom, particularly in data center construction, is set to boost copper demand further. Copper industry insiders expect AI to drive an additional one million metric tons of copper demand by 2030. Economists predict that supply shortages and increasing demand will push copper prices to $5.44 per pound by 2026, an 11% rise from current prices.
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