AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
Due to signs of economic activity picking up in the two largest economies, China and the United States, the price of the metal copper, often referred to as an economic barometer, has been on the rise recently. On Thursday, the three-month copper futures contract price on the London Metal Exchange (LME) rose by 1.5%, reaching a 14-month high.
Since early February, the copper market has rebounded due to rapidly increasing supply risks. Today, dovish comments from Federal Reserve Chairman Jerome Powell have added new impetus to the rebound in metal prices.
Ivanhoe Mines announced on Wednesday that quarterly production at the Kamoa-Kakula mine in the Democratic Republic of the Congo will decrease by approximately 6.5%, while neighboring Zambia’s drought conditions pose significant risks to the country’s expanded mining output plans. Major disruptions in supply from the world’s leading mines have prompted smelters in China to consider implementing joint production cuts. China’s refined copper production accounts for over half of the global production.
At the same time, the initial signs of resuming growth in global manufacturing have reignited hopes among commodity traders for a significant increase in copper demand. They believe that the tightening market environment amid the recovery of global manufacturing could help drive copper prices to new highs.
It is certain that concerns about global demand in the real estate industry and some key manufacturing sectors still persist in the market. However, an increasing number of traders believe that the resurgence of manufacturing in China and the United States, as well as the large-scale infrastructure spending in emerging markets such as India, and the global frenzy for artificial intelligence (AI), will open up substantial new areas of copper demand growth.
According to Morgan Stanley, global AI data centers’ demand for electricity is expected to grow at an annual compound rate of 18% from 2024 to 2027. The demand for copper in AI data centers may increase from 200,000 to 500,000 tons annually in 2023 to 500,000 to 1,200,000 tons in 2027, with an annual compound growth rate of 26%.
Analysts at Goldman Sachs pointed out in a research report that there will be a supply shortfall of 250,000 tons in the second quarter of this year and a supply shortfall of 450,000 tons in the second half of 2024, indicating a bullish outlook for copper prices to reach $10,000 per ton by the end of the year.
