LME copper prices have risen for five consecutive days! Goldman Sachs outlook on copper trajectory: expected to peak in August, with a peak value as high as $10,050

According to the Zhitong Finance APP, LME copper prices have risen for five consecutive trading days, hovering around $9,700. Previously, the analysis team of Goldman Sachs, a major Wall Street bank, pointed out that as supply tightens due to tariff pressures outside the United States, copper prices are expected to peak at around $10,050 per ton in August 2025. With Nvidia's stock price hitting a new all-time high, the market's strong demand expectations for AI computing infrastructure are also likely to drive copper prices upward before August. The demand for copper, a core metal needed for the wave of AI data center construction, is also experiencing explosive growth alongside AI chips and other computing infrastructure.

At the London Metal Exchange (LME), the premium for spot contracts has surged, and copper traders are experiencing severe squeeze effects. Due to the possibility of the U.S. government imposing tariffs on copper and other non-ferrous metals, local copper futures prices in the U.S. have soared. Meanwhile, record shipments to the U.S. have drawn down inventories from other regions globally, exacerbating supply tightness, which has led to LME copper prices being on an upward trajectory this year.

"In light of tariff concerns and the push from AI data centers, the copper market outside the U.S. is continuously tightening. Although some regions globally still show excess supply, it has raised concerns about regional supply shortages," wrote Goldman Sachs analyst Eoin Dinsmore and others in a research report released on Thursday.

Since the beginning of this year, U.S. President Trump has repeatedly threatened to impose tariffs on imported copper to boost domestic industrial recovery and promote his administration's ambition of "bringing manufacturing back to America," leading U.S. traders to stockpile copper inventories essential for economic growth, capacity expansion, and AI data center construction. At the end of February this year, Trump instructed the U.S. Secretary of Commerce to investigate foreign copper imports under Section 232 of the Trade Expansion Act and submit a report within 270 days.

The Goldman Sachs analysis team pointed out that the continuous decline in U.S. external inventories driven by tariff pressures, along with the relative resilience of overall demand in the Chinese market and futures market sentiment, suggests that copper prices are expected to continue rising. Goldman Sachs' forecast indicates that if the U.S. government imposes a 25% import tariff on copper in September, copper prices may fall back to around $9,700 per ton by December due to inventory expansion caused by pre-purchase waves in North America.

This week, the price spread between LME copper spot and three-month futures has eased, alleviating the pressure on buyers from the recent surge in spot prices.

In terms of specific uses for copper, it is not only needed for the U.S. government's ambitious "bringing manufacturing back to America" initiative but also for large-scale infrastructure construction policies urgently required by countries like China, Germany, and India to promote economic growth. The global energy transition and the wave of data center construction also rely heavily on copper.

Copper is widely used in various fields such as electricity, construction, industrial machinery, transportation, and communication, which are at the core of global economic activity. Therefore, when governments implement policies to promote economic growth, and during capacity expansions driven by new economic growth drivers like artificial intelligence and energy transition, industrial production and infrastructure construction will significantly increase the demand for copper, leading to rising copper prices. Conversely, when the pace of economic expansion stagnates or falls into recession, and the global economy lacks new momentum, the demand for copper sharply declines, and copper prices typically drop rapidly. Thus, copper is often referred to as "Dr. Copper." Title.

In the era of artificial intelligence and digital transformation, the construction of data centers has led to an explosive growth in copper demand. The power transmission, cooling systems, and electronic devices of data centers heavily rely on copper. This structurally new demand is gradually becoming a new growth engine for the copper market.

In the massive data centers behind generative AI applications like ChatGPT, copper is primarily used in power distribution equipment and grounding, as well as in interconnection systems that are crucial for high-speed data transmission. Specifically, copper is focused on high-speed power transmission (such as high-speed copper cables, connectors, and busbars), as well as heat exchangers and water tanks, grounding and interconnection, and piping and HVAC systems.

In NVIDIA's (NVDA.US) AI server clusters, high-speed copper cables play a critical role in data transmission, with Amphenol (APH.US) currently being the core supplier of high-speed copper cables for NVIDIA's AI server clusters, such as exclusively providing high-speed copper cables for NVIDIA's GB200 AI server; NVIDIA's InfiniBand network and NVLink high-speed interconnect system require advanced physical connection components, with Amphenol being the core supplier of high-speed interconnect solutions.

Mike Henry, CEO of Australian mining giant BHP, recently stated that the construction and expansion of ultra-large-scale data centers globally will provide strong computing power support for the development of artificial intelligence, requiring a large supply of copper. The BHP CEO predicts that by 2050, the demand for copper from data centers alone will increase sixfold, rising from the current annual demand of about 500,000 tons to nearly 3 million tons per year