Recently, Robin Griffin, vice president of metals and mining at Wood Mackenzie, said, “We’ve forecast a significant shortfall in copper through to 2030.” He attributed this mainly to the ongoing unrest in Peru and rising demand for copper from the energy transition sector.
He added: “Whenever there is political unrest, there are a range of impacts. And one of the most obvious is that mines may have to close.”
Peru has been rocked by protests since former President Castillo was ousted in an impeachment trial last December, which has affected copper mining in the country. The South American country accounts for 10 percent of global copper supply.
In addition, Chile – the world’s largest copper producer, accounting for 27% of global supply – saw copper production fall 7% year-on-year in November. Goldman Sachs wrote in a separate report on Jan. 16: “Overall, we believe Chile’s copper production is likely to decrease between 2023 and 2025.”
Tina Teng, market analyst at CMC Markets, said, “Asia’s restarting economy will have a significant impact on copper prices as it improves the demand outlook and will further push copper prices higher due to supply shortages against the backdrop of a clean energy transition that makes mining more difficult.”
Teng added: “Copper shortages will persist until a global recession caused by the current headwinds occurs, probably in 2024 or 2025. Until then, copper prices could double.
However, Wolfe Research economist Timna Tanners said she expects copper production activity and consumption will not see a “huge blowout” as Asian economies recover. She believes that the broader phenomenon of electrification may be a greater fundamental driver of copper demand.
Post time: Sep-07-2023