Market Data 
The demand in the market has been improving, with a more positive cyclical outlook, according to Julius Baer, which points to the energy transition as the strongest growth driver, including electric vehicle production and the installation of solar panels and wind turbines.
“Some have been labelling artificial intelligence data centres as another source of demand, but we would be surprised to see a material impact on the market,” highlights the Swiss bank, which assesses the cooling of supply expansion as important, “as it pushes the copper market closer to the expected structural deficit.” Julius Baer believes that the commodity market may undergo short-term consolidation after its recent recovery but assesses the fundamentals as solid and estimates $10,000 per ton in the long term.
“Reflecting China’s persistent economic problems, the mood across the industrial metal markets remained rather downbeat for most of last year. This seems to be changing as of late, following improving leading economic indicators, particularly in the copper market,” highlights Carsten Menke, Head of Next Generation Research at Julius Baer, who notes that prices have risen more than 6% since the beginning of the month.
For Julius Baer, the growth of data centers amid the AI boom is not one of the reasons for the appreciation. “Most of the copper used in data centres is related to power distribution, with the remainder being related to the cooling system. This should result in less than 1% of additional demand growth during the next decade,” concludes the expert, who considers the decrease in supply growth as a point to be monitored.
