Data center copper demand may need to be reassessed! Copper prices fell below $13,000 USD, Goldman Sachs warned that the decline this year could reach 15%.

Notice that, on Thursday, the London Metal Exchange (LME) copper futures prices fell from historical highs, dropping by up to 2% to $13,033 per ton. Previously, both base metals and precious metals had surged significantly in the early weeks of 2026. Goldman Sachs analysts predict that future declines will be more severe and forecast that by the end of 2026, LME copper prices will fall to $11,000 per ton, as "the fundamentals of the copper market have been deteriorating in recent months, global inventories continue to rise, scrap copper supply is increasing, and demand performance is below expectations." Goldman Sachs stated in their report that "we continue to believe that most of the copper price increases have already been realized, and the current copper price is increasingly susceptible to corrections," and that recent trends are "largely driven by speculative fund inflows." Analysts also pointed out that Chinese copper demand growth in the fourth quarter of 2025 was lower than expected, and there is further downside risk due to weak electric car sales; at the same time, high prices may prompt the replacement of copper with aluminum in the production of electric vehicle batteries. Goldman Sachs stated that the Trump administration's decision to temporarily postpone tariffs on critical mineral imports, focusing instead on direct negotiations and price floors, may also lead to a decrease in US copper premiums, although the high prices of around $13,000 may be maintained throughout the first quarter due to the "continued uncertainty surrounding US refined copper tariffs." Many analysts remain optimistic about copper prices, pointing out that the revival of demand lost in the new energy and artificial intelligence sectors will support prices due to long-term expectations of supply shortages. Reevaluation of copper demand may be on the horizon. According to a technical paper published on NVIDIA's official website last year, a traditional one-gigawatt data center rack requires up to 500,000 tons of copper busbars, causing concerns about the future supply and demand situation of copper. However, recent careful observers have found that the conclusions of this paper contain significant calculation errors, and in fact, a one-gigawatt data center only requires over 200 tons of copper, which is roughly equivalent to 500,000 pounds, suggesting that the paper may have used the wrong unit. NVIDIA has since corrected this error, changing the 500,000 tons in the paper to 200,000 kilograms, or 200 tons. This means that some previous expectations about data centers leading to a severe copper shortage may have been too aggressive. Nevertheless, the resurgence in demand for copper in the new energy, artificial intelligence, and construction sectors may continue to support the prosperity of the copper market.