World сopper deficit could reach 9.9 Mt By 2035 – S&P Global

The global deficit of copper by 2035 may reach a record 9.9 million tons against the backdrop of a doubling of demand due to the transition to green energy. This was reported by S&P Global.

Supply in the global copper market could fall significantly as demand rises by 2035. The severity of the shortfall will largely depend on the industry’s ability to build capacity. The upcoming massive green energy transition will boost overall copper demand to around 50 million tons per year from the current 25 million tons per year.

“We have two scenarios, one of which is a conventional industry with current trends, without the introduction of green initiatives. The second scenario assumes a gradual transition to carbon-free production, when the copper industry is at the highest limits of what is realistic to offer in terms of demand growth,” the report says.

Thus, according to the first scenario, by 2035 the copper market may face a deficit of 1.5 million tons per year, and the second — 9.9 million tons. At the same time, any of them can lead to a historical shortage of copper. At the moment, the largest deficit was observed in 2014, and amounted to just under 1 million tons.

The timing of the energy transition and changes in copper mining technology could play a critical role in determining how much the copper shortage will grow by 2035, analysts say. The gap between supply and demand, in the end, is still unavoidable.

Rising demand will accelerate through 2035 and then slow down as industries begin to meet their targets for net-zero emissions by 2050.

“The copper industry will be put to the test to reach supply levels under the second, more ambitious scenario. The mine capacity utilization rate will be at the level of 90%,” notes S&P Global.

Copper miners will be affected by several factors related to environmental regulations, permits, licenses, infrastructure and labor. However, miners will be able to overcome them through innovation.

As GMK Center reported earlier, in July copper prices fell to their lowest level in the last 17 months due to fears of a contraction in the global economy and falling demand for the metal.

As a reminder, at the end of 2021 world production refined copper amounted to 24.5 million tons, and real consumption — 25.3 million tons. The deficit amounted to 475 thousand tons, which is almost the same as in 2020.

The decline in Russian copper exports has caused some tension in a growing and scarce market. Copper production in Russia in 2021 amounted to 875 thousand tons, or 4% of the world.