The red metal may still be facing pressures, but the industry is betting that modern life can’t live without it, says Steve Freeth.
Copper prices may still be being buffeted by China growth jitters or US trade war tensions, but the mood at the recent CESCO annual global copper get-together in Chile was upbeat.
At the heart of the optimism were predictions that copper supply faces even higher disruptions this year, leading to a global deficit. Just how big depended on whom you asked.
New research from Adroit Market Research shows that world copper demand is projected to reach more than 30 million tons by 2025, up from about 24 million tons from last year. In fact, no-one expects copper demand to ease as it becomes the go-to metal for the modern world – namely electrification and clean energy.
New or expanded mines – particularly in Chile, the United States and Peru – have now been green lighted and are expected to add an extra one million tons to supply by 2024. Not everyone is convinced that this will be enough, though, especially in the next few years.
Morgan Stanley is one of them. It’s made copper its top metals pick, saying it sees the market heading to a de cit of 406,000 tons this year and 187,000 tons in 2020.