AI-Driven Demand Sends Base Metal Prices Soaring

Base metal prices saw a significant increase in July due to strong demand from the artificial intelligence (AI) sector and supply risks. The price of copper jumped 4.7% per pound, aluminum rose 2.5%, nickel increased by 5.2%, and zinc also rose 2.5%. The AI sector's growth is driving demand for these metals, which are crucial in manufacturing, technology, and energy.

The market is concerned about the supply of copper, aluminum, nickel, and zinc due to mine production issues, low processing costs, and global stock levels. Global copper stocks continue to fall, while China's strong demand remains a factor in the price increase. The US Federal Reserve's shrinking opportunities to raise interest rates also contributes to the upward trend.

South Korea and Chile's cooperation on critical minerals has also boosted demand for these metals. Critical minerals are essential for strategic industries, but their supply is vulnerable to disruption. Lithium and copper are included in this group due to their importance in modern industrial chains.