AI data centers to worsen copper shortage – BNEF

[Redator]

The rapid buildout of artificial intelligence (AI) data centers is poised to tighten the global copper market further, potentially pushing the supply shortfall to 6 million tonnes by 2035, according to a new BloombergNEF (BNEF) report.

BNEF analysts said copper demand from the sector will average around 400,000 tonnes annually over the next decade, peaking at 572,000 tonnes in 2028. The cumulative total in use by data centers could top 4.3 million tonnes by 2035. This comes on top of surging demand from other sectors, such as power transmission and wind energy, where copper usage is expected to almost double by 2035.

“AI capacity additions are adding pressure to an already tight market,” the analysts noted, pointing to years of underinvestment in new copper supply.

Price pressures ahead

With demand accelerating and supply growth lagging, BNEF expects copper prices to peak at $13,500 per tonne in 2028. The shortfall is exacerbated by a projected global copper supply of just 29 million tonnes by 2035, well below the 35 million tonnes needed to meet demand.

Why data centers need so much copper

Copper can account for nearly 6% of the capital expenditure of a data center project. Its role is critical:

• Electrical conductivity – maximizes efficiency in transmitting and distributing electricity.
• Thermal conductivity – supports high-performance heat exchangers, vital for cooling servers.
• Ductility and malleability – allow copper to be shaped into compact components like connectors.

Data centers rely on copper for a wide range of applications, including power cables, busbars, electrical connectors, heat exchangers and sinks, and power distribution strips

Microsoft’s $500 million data center in Chicago alone required 2,177 tonnes of copper during construction.

Meanwhile, North American data center infrastructure alone is expected to grow from a $33 billion business in 2020 to $70 billion in 2030 and $185 billion in 2040.