Following a significant copper shortfall last year that drove a price rally, the International Copper Study Group (ICSG) is saying that copper supply will outstrip demand this year and next year.
The ICSG is forecasting market surpluses of 80 000 t and 110 000 t for 2021 and 2022, respectively. This is after a sharp increase in Chinese apparent refined copper usage pushed the market to a deficit of 600 000 t in 2020.
The group notes that world copper mine production, adjusted for historical disruption factors, is expected to increase by 3.5% in 2021 and 3.7% in 2022, as output recovers from the 2020 Covid-19 constraints and new projects enter production.
Some of the major copper mines starting in 2021 and 2022 include Kamoa-Kakula in the Democratic Republic, Quellaveco in Peru, Spence-SGO and Quebrada Blanca QB in Chile, as well as Udokan in Russia.
Refined copper production is forecast to rise by 3% in 2021 and 2022.
Apparent refined copper usage is expected to remain unchanged in 2021 and to grow by 3% in 2022. The ICSG notes that copper is essential to economic activity and even more so to the modern technological society and will thus continue to report sustained demand growth.