Copper Surges as AI Boom Strains Industrial Infrastructure
The AI boom is driving up demand for copper, causing prices to climb close to their historical high on the London Metal Exchange. The rapid construction of AI data centers and power grids requires enormous amounts of this industrial metal.
Copper inventories are declining, while trading volumes have risen by over 40% since the beginning of the year. This shortage is particularly acute in China, where copper inventories on the Shanghai Futures Exchange have fallen by about 80% since March.
The situation is further complicated by the fact that transformer production also depends on copper and skilled labor. Equipment manufacturers are expanding production capacity, while US authorities have designated these supply chains as critical to national economic security.