Copper prices are soaring due to increased demand from artificial intelligence (AI) data centers and power grid investments. Analysts suggest that if data center investments gain further momentum, silver prices may also rise in response.
According to the Korea Exchange on September 10, investment products related to copper and beneficiary stocks are on the rise. The Shinhan Leveraged Copper Futures ETN, which tracks copper futures prices, has increased by 16.41% over the past six months. At the London Metal Exchange (LME), the three-month copper price has surged to $14,737 per ton, setting a new record high.
Copper, often referred to as 'Dr. Copper,' serves as a leading indicator of the global economy. Typically, prices rise with increased production and construction during economic upturns, while they tend to fall when a downturn is anticipated. Copper is a key raw material used throughout the power industry, from generation to transmission and final consumption.
However, many experts believe that the recent surge in copper prices cannot be solely explained by economic trends. The long-term demand is increasing due to the expansion of AI data centers and power grid construction, while supply is constrained by production disruptions at major mines. As the construction of AI data centers and investments in renewable energy and power grids expand, copper demand is expected to rise.
Additionally, the potential increase in tariffs on refined copper imports in the United States is also seen as a factor driving prices higher. The U.S. Department of Commerce is expected to impose a 15% tariff on refined copper imports starting next year, leading to a rush of imports before the tariff takes effect.
Demand for copper in the industrial sector is also projected to continue. S&P Global, a financial information firm, forecasts that global copper demand will rise from 28 million tons last year to 42 million tons by 2040. If supply does not increase accordingly, there could be a shortfall of about 10 million tons by 2040.
As a result, the upward trend in copper prices is expected to persist for some time. Samsung Futures stated, "As long as there is no clear stance on tariffs, we believe copper prices will generally have room for further increases for the remainder of the year."
With rising copper prices, the stock outlook for related companies is also positive. Defense contractor Poongsan, which has a high proportion of copper processing and consumption, is classified as a leading stock in this sector. NH Investment & Securities has recommended a 'buy' rating for Poongsan, citing the tight supply-demand situation that is likely to sustain strong prices for copper products.
Some analysts predict that with the establishment of AI data centers, silver may soon enter a significant upward cycle alongside copper. Silver is the best conductor of electricity and heat among all metals, ensuring consistent demand during the construction of data centers. On this day, silver futures prices in the international market have risen by 63% compared to a year ago.
According to the Korea Exchange on September 10, investment products related to copper and beneficiary stocks are on the rise. The Shinhan Leveraged Copper Futures ETN, which tracks copper futures prices, has increased by 16.41% over the past six months. At the London Metal Exchange (LME), the three-month copper price has surged to $14,737 per ton, setting a new record high.
Copper, often referred to as 'Dr. Copper,' serves as a leading indicator of the global economy. Typically, prices rise with increased production and construction during economic upturns, while they tend to fall when a downturn is anticipated. Copper is a key raw material used throughout the power industry, from generation to transmission and final consumption.
However, many experts believe that the recent surge in copper prices cannot be solely explained by economic trends. The long-term demand is increasing due to the expansion of AI data centers and power grid construction, while supply is constrained by production disruptions at major mines. As the construction of AI data centers and investments in renewable energy and power grids expand, copper demand is expected to rise.
Additionally, the potential increase in tariffs on refined copper imports in the United States is also seen as a factor driving prices higher. The U.S. Department of Commerce is expected to impose a 15% tariff on refined copper imports starting next year, leading to a rush of imports before the tariff takes effect.
Demand for copper in the industrial sector is also projected to continue. S&P Global, a financial information firm, forecasts that global copper demand will rise from 28 million tons last year to 42 million tons by 2040. If supply does not increase accordingly, there could be a shortfall of about 10 million tons by 2040.
As a result, the upward trend in copper prices is expected to persist for some time. Samsung Futures stated, "As long as there is no clear stance on tariffs, we believe copper prices will generally have room for further increases for the remainder of the year."
With rising copper prices, the stock outlook for related companies is also positive. Defense contractor Poongsan, which has a high proportion of copper processing and consumption, is classified as a leading stock in this sector. NH Investment & Securities has recommended a 'buy' rating for Poongsan, citing the tight supply-demand situation that is likely to sustain strong prices for copper products.
Some analysts predict that with the establishment of AI data centers, silver may soon enter a significant upward cycle alongside copper. Silver is the best conductor of electricity and heat among all metals, ensuring consistent demand during the construction of data centers. On this day, silver futures prices in the international market have risen by 63% compared to a year ago.
* This article has been translated by AI.
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