Bernstein breaks down 3 misconceptions around data centers and copper

Bernstein said expectations for copper demand driven by AI data center expansion may be overstated, even as global data center capacity continues to grow rapidly.

The report said global data center capacity could approach 200 gigawatts by 2030. But advances in power distribution technology are expected to reduce the amount of copper required per facility.

Copper demand from data centers is projected to remain around 400,000 to 500,000 tonnes annually over the next several years before declining in the 2030s despite continued capacity growth.

A key factor is the industry’s expected shift toward 800-volt direct-current (800VDC) architecture, particularly in AI-focused facilities.

Higher-voltage systems require less current and can reduce copper requirements by as much as 45% compared with existing infrastructure, according to the report.

The report also said the relationship between data center growth and power-grid copper demand may be weaker than many investors expect.

Lengthy grid interconnection delays in the United States and Europe are pushing operators toward behind-the-meter power generation, reducing the need for immediate transmission and distribution investment.

Energy storage systems, meanwhile, are emerging as a more significant source of future copper demand.

Global energy storage capacity is forecast to rise from about 550 gigawatt-hours in 2025 to roughly 1,500 gigawatt-hours by 2030, supported by growing renewable energy deployment and increasing demand for grid flexibility.

On the supply side, the report upgraded its outlook for BHP’s Escondida OGP2 project and First Quantum’s Cobre Panama project, while taking a more cautious stance on Barrick Mining’s Reko Diq development.

The report continues to forecast a copper market deficit in 2026, followed by a broadly balanced market through 2029.

Deficits are expected to widen from 2030 onward as electrification-related demand outpaces supply growth.

The report also raised price targets for Antofagasta and Freeport-McMoRan while maintaining Market Perform ratings on both companies, saying copper-focused miners are already trading at meaningful premiums to historical valuation averages.