Damo predicts that data center demand for copper may account for 3.3% of global copper demand by 2027. By contrast, electric vehicles may account for only 5.2% of demand.
Is the AI data center both an “electric monster” or a “copper devour”?
Morgan Stanley said in its latest report that with the rapid development of AI technology, copper demand will increase significantly, and data centers will become a new growth point for copper demand. By the fourth quarter of 2024, the price of copper may rise to 10,500 US dollars/ton, which is 18% higher than the current level.
Damo wrote in the report that from 2024 to 2027, demand for electricity in global data centers will grow at a CAGR of 18%. Copper demand in data centers may increase from 200,000 tons to 500,000 tons per year in 2023 to 500,000 tons to 1.2 million tons in 2027, with a compound annual growth rate of 26%.
By 2027, data center demand for copper is likely to account for 3.3% of global copper demand (compared to electric vehicles, which may account for only 5.2%), which will drive up copper prices and have a profound impact on the global copper market.
In data centers, copper is mainly used in power distribution equipment (about 75%) and grounding and interconnection (about 22%). Specifically, copper is mainly used for power transmission (such as cables, connectors, busbars), as well as heat exchangers and sinks, grounding and interconnection, and piping and HVAC systems.
Notably, although fiber-optic cables have taken their place in data transmission, copper still dominates power distribution and heat exchangers. The advantages of copper are lower installation costs, less electricity consumption, and the thermal design does not require much cooling.
Editor/Somer