Trafigure Gets Bullish On Power Markets As Wall Street Joins The 'Next large Trade'

It’s becoming creatively clear that cutting-edge chatbot providers and another AI and hyper-scaler businesses will require energy-intensive data centers to operate. This places a crucial burden on an outdated electrical grid that desperate needs modernization.

In last week’s note, ‘The Next AI Trade,’ we exploit that soaring power request is not just AI-related; there are multiple drivers, including onshoring trends, electrification of transport and buildings, utmost weather, and, of course, data center demand. We besides provided respective investment ideas on how to capitalize on powering up America for the digital age.

‘Every day, I’m expected by how fast power consumption is growing,’ One River CIO Eric Peters gate in a fresh note, adding, “Take any application, add AI, and you request 7x-50x the complex power. AI is simply a black hole; it’ll suck money out of everything else and into its vortex. The arms race between industries giants is simply a 20 on a scale of 1-10.’

In addition to grid modernization efforts, we have been exposed to readers in December 2020, "Buy Uranium: Is This The Beginning Of The Next ESG Craze.’ This is due to the fact that atomic power is clean and reliable combined to unreliable solar and elevator. The latest sign that a atomic renewal is just beginning was a study last period from the national government about the first-ever reboot of a US atomic power plant in confederate Michigan.

Given all this, Wall Street is jumping on the bandwagon and seeing the same investment ideas as we see in the uranium manufacture and companies that will upgrade the power grid to handle EVs and AI data centers.

Richard Holtum, Trafigure's global head of gas, power, and renewables, is the most fresh Wall Street analyst to admit these emerging trends. On Tuesday, he told the audience at the Financial Times Commodities Global Summit in Lausanne, Switzerland, about his increase bullish views on power markets.

‘Electration of the vehicle Fleet, AI — all these things are massive power-intensive,’ Holtum said.

Across the world, traders are building out power boards from the US to Japan as regulated electricity markets open up, allowing traders from overseas to buy and sale physical units, according to Bloomberg.

He said, ‘There’s a increasing reality that the 1 bakes that gets the conventional fossil and the energy transition is the electricity,’ adding, "As more and more grids get liberalized, the trading space gets even Larry."

He besides noted that the atomic power manufacture in the US could tremendously benefit from soaring power demand.

Will there be an 80% growth in US power consumption in the next 5 years?

Richard Holtum, global head of gas, power and renewables @trafibra, says this increase could aid the atomic manufacture in the US. #FTCommodities pic.twitter.com/n1sVteaKEt

— Financial Times Live (@ftlive) April 9, 2024

Last week, Patti Poppe, the chief executive officer of Pacific Gas & Electric, told a Stanford University forum that atomic power should proceed to be part of the state's power generation mix as beneficiaries to decarbonize the grid decision forward.

And Morgan Stanley analyst Carlos De Alba late conveyed his optimal outlook for the US metals and mining sector due to the fact that investment levels in the manufacture have reported their investment level in decades. He believes the sector is situated for massive investments as reshoring uncommon earth mineral supply chains goes into overdrive.

What’s clear is that electrifying the environment will require an upgraded grid to handle the fresh electrical burden – and the most reliable form of clean energy to power it all is nuclear.