This commodity is poised for 50% upside as energy transition and AI demand booms [Video]
|The Beatles told the world, “Love is all you need.” But according to GSC Commodity Intelligence, “Copper is all you need” – especially when it comes to the energy transition and global artificial intelligence technology boom.
As an unprecedented phenomenon known as “the shortage of everything” continues to drive Commodity prices higher in 2024 – Copper has captured the attention of Wall Street’s most powerful banks as the next major Commodity that could be destining for exponential upside this year.
Copper's second secular “bull market this century” is off to a red-hot start in 2024 with prices blasting above $10,000 a ton for the first time in two years.
The surge in Copper prices is being fuelled by a magnitude of bullish macro tailwinds including a global supply crunch due to mine closures and red-hot demand for the metal to power energy transition and artificial intelligence technologies.
Copper, one of the best electrical-conducting metals, is already used worldwide in motors, batteries and wiring – nicknamed "Dr. Copper" because demand for it is widely seen as a barometer for global economic health.
In their latest research report, analysts at GSC Commodity Intelligence estimated – data centers to power AI servers will require an additional 1 million metric tons of Copper over the next three years. The report went on to say that global data center energy consumption reached 382 TWh in 2022, with a forecast to exceed 803 TWh by 2027. Put another way, 382 TWh is equivalent to France's annual electricity consumption.
In addition, new demand is also forecast to come from electric vehicles, which are built with four times more Copper than vehicles with internal combustion engines.
Overall, as demand surges and the world needs more Copper and lots of it fast – there’s one big problem.
Global supply is shrinking at a record pace off the back of a "triple deficit" – low inventories, low spare capacity and low investment.
All of this means one thing – the Copper market is only going to get tighter and that will inevitability push prices a lot higher from current levels
According to Goldman Sachs, Copper prices are currently only at “the foothills of what will be its Everest” – forecasting prices will average an astonishing $15,000 per metric ton next year.
Copper isn’t the only Commodity to rocket on low inventory this year. Its upside has been replicated by other key “Green Energy Metals” including Cobalt, Lithium, Nickel, Iron Ore, Zinc, Uranium and Aluminium, which just made headlines recently by posting its biggest intraday gain since 1987.
Whichever way you look at it, one thing is clear. The macroeconomic backdrop for Commodities in 2024 is looking more bullish than ever before – and it certainly won't take much for prices to breach new record highs in the coming weeks and months ahead.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
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