COPPER MARKET TRENDS: A LOOK AT GLOBAL SUPPLY, DEMAND & PRICING
Copper is a crucial economic health indicator due to its extensive use in industries ranging from construction to renewable energy and electric vehicles (EVs).
In 2024, global copper mine production saw a modest increase of 0.5%, with 2025 projections suggesting further growth at a rate of 3.9%. However, several factors are hampering this supply growth. Key producers like Chile and Peru, which account for 35% of the global supply, face hurdles like declining ore grades, labor disruptions, and geopolitical risks.
Notably,
significant supply disruptions have occurred, such as the closure of the Cobre
Panama mine in November 2023 and production cuts by industry giants like Anglo
American and Teck Resources.
In the first quarter of 2025, while the refined copper supply increased by 1%, a 14% drop in Chilean output limited overall gains. Contrastingly, Peru and the Democratic Republic of Congo saw increases of 7% and 6% respectively, due to expansions like Anglo American’s Quellaveco and Ivanhoe Mines’ Kamoa-Kakula mines.
Despite the constrained growth, the presence of smelter overcapacity in China resulted in a refined copper surplus in 2024 with another surplus projected for 2025, albeit at a smaller volume.
Looking at long-term supply challenges, S&P Global projects global copper production to peak at 23.5 million tons in 2025–2026. This will then be followed by a 2.3% annual decline through 2035 owing to aging mines and reducing ore grades.
Meanwhile, copper demand globally is robust, fuelled primarily by sectors involving energy transition, such as EVs, renewables, grid infrastructure, traditional sectors like construction & electronics and ESS (Energy Storage Systems).
In China, which accounts for roughly 56% of
global consumption, the demand is expected to grow by 2.2% in 2025. Non-China
global demand is projected at 2.9% during the same period. The energy
transition serves as a significant demand catalyst, with data centers for
AI, digitalization and ESS emerging as a
new demand source.
Predictions show a 70% increase in global copper demand by 2050, reaching over 50 million tons annually, with the energy transition sectors playing a significant role. Emerging markets and infrastructure spending will serve as additional driving factors.
The current price of copper is approximately $4.90 per pound or $9,800 per ton. Some forecasts suggest copper could reach $11,500 per tonne in the near future, driven by strong demand from renewable energy and electric vehicle industries.
Long-term
projections indicate prices might climb even higher, with bullish scenarios
estimating up to $13,000–$15,000 per tonne by 2027.
These
forecasts are influenced by variables such as global economic trends, the
resilience of supply chains, and progress in sustainable technologies.
In conclusion, as a critical resource in today's industries, Copper faces significant challenges from constrained supply and surging demand. Addressing these hurdles will necessitate strategic planning and innovations.
SP
“For information purposes only”
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(Disclosure-the writer is a shareholder in
minestockers.com)
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