Copper market in deficit
Copper market in deficit
For the next five to ten years, experts expect a deficit on the copper market.
The reason for this is the decline in production, for example at one of the largest mines in the world, Codelco. After producing around 1.7 million tons of copper in 2020, the company is now expecting a significant drop in production over the next few years. More than 40 percent less copper is expected to be produced by 2025. By 2030, the decline is expected to be as much as around 76 percent, as ore reserves are depleted. Most of the production will come from new mines, although long lead times are required.
Although new copper mines are starting up around the world, copper demand from the electromobility and renewable energy sectors is increasing enormously. The Chinese government, for example, recently updated its development plan. Now, 40 percent of cars sold in 2030 are to be electric. The old development plan only specified a share of 20 percent. In addition, China is suffering from an electricity shortage and at the same time wants to reduce its dependence on coal imports. By 2030, the country's copper demand will increase from the current 24 percent to an estimated 28 to 36 percent. This would require an additional 8.1 million tons of copper at current production levels. In addition, new copper projects in Chile and Peru, for example, involve a certain labor risk that can lead to delays and interruptions. Even if there should be a supply surplus in the short term due to the opening of new mines in the current year, a deficit is expected on the copper market in the long term.
Therefore, an investment in companies with copper in the projects could be considered, for example Copper Mountain Mining or Hannan Metals.
Copper Mountain Mining - https://www.youtube.com/watch?v=7Pyg-9M_6eM - owns 75 percent of the producing Copper Mountain Mine in British Columbia, as well as the Eva Copper project in Australia.
Hannan Metals, one of the Peru majors, is advancing the San Martin copper-gold-silver project.
Current corporate information and press releases from Copper Mountain Mining (www.resource-capital.ch/en/companies/copper-mountain-mining-corp/) and Hannan Metals (www.resource-capital.ch/en/companies/hannan-metals-ltd/).
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