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Report summary
Sentiment in the copper market has continued to be swayed by events on the global stage rather than copper’s supply-demand fundamentals. Key amongst these has been the ongoing dispute between China and the USA. The combination of the changes to both supply and demand in 2018, now means that we are presenting a much tighter market outlook over the next few years, which should support higher prices. This rise in prices, in reaction to the anticipated deficits that are due to emerge by 2020/2021, should provide sufficient confidence to encourage producers to reactivate shuttered mines and undertake incremental expansions, mine life extensions and eventually develop the larger projects that are needed to close the implied supply gap. This additional output will result in surpluses emerging and stocks replenished from 2022. Once this new supply starts to reach the market, prices will reverse their upward trend, falling towards our forecast long-term price level by 2028.
Quick read: 6 things you need to know about the long term outlook for the global copper market
- The global copper market is set to experience much tighter fundamentals over the next several years.
- The outlook for 2020/2021 will be tight, with another period of supply deficits emerging.
- Additional tonnage will come to the market with mine supply growth (before any adjustments) set to average around 3% per annum over the next couple of years.
- Since 2017, as prices have recovered, commitments have been made to 2.0Mt of brownfield and greenfield projects. There are signals that major producers are still willing to invest in growth.
- However, we estimate that the perceived supply gap that needs to be filled by greenfield projects will stand at ~4.8Mt by 2028.
- We remain confident that our long-term price of $7,275/t ($3.30/lb) in constant 2018$ will be sufficient to bring on adequate mine output in order to satisfy market requirements.
Purchase the full report for an in-depth analysis of each of these 6 factors, including charts and data sets.
Table of contents
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Executive summary
- Market outlook
- Demand update
- Key risks
Tables and charts
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