Reports from prominent industry groups reveal what the future may have in store for copper.

By Mark S. Kuhar

The International Copper Study Group (ICSG) met via web-meetings, on 28-29 April 2022. Government delegates and industry advisors from most of the world’s leading copper producing and using countries participated to discuss key issues affecting the global copper market. 

In the meeting of the Statistical Committee, the ICSG view of the world balance of refined copper production and use was developed. After three years of stagnation, world copper mine production increased 2.4% last year with higher growth of about 5% expected in both 2022 and 2023:

  • COVID-19 (Omicron) related restrictions and workforce absenteeism continued to constrain mine output at a number of operations at the beginning of 2022. However, world mine production this year is expected to benefit from additional output from new and expanded mines as well as an improvement in the general situation regarding the pandemic.
  • Following a four-year period where only two major copper mines were commissioned, the pipeline of copper mine projects is improving. Major projects starting in 2021/2023 include Kamoa Kakula in the Democratic Republic of the Congo, Quellaveco in Peru, Spence-SGO and Quebrada Blanca QB2 in Chile and Udokan in Russia. A number of medium and small projects as well as expansions have also, or are expected to, start in the period 2021-2023.
  • Most projects are concentrate producing mines which should result in sustained growth in world concentrate output in 2022 and 2023.
  • SX-EW production is expected to recover in 2022 from last year’s decline and continue rising in 2023 with growth mainly supported by expansions and new projects in the DRC and, to a lesser extent, in the USA. Chilean SX-EW output is expected to continue declining.

After three years of constrained growth, world refined copper production is forecast to rise by about 4.3% in 2022 and 3.6% in 2023:

  • 2022 will see a recovery from the constrained output last year when a number of countries were impacted by operational issues and reductions at SX-EW plants that led to a 1.3% decline in World ex-China refined production.
  • World refined production growth in 2022 and 2023 will be mainly sustained by the continued expansion of Chinese electrolytic capacity and new and expanded SX-EW operations in the DRC (electrowinning capacity).
  • Both primary (from concentrates and SX-EW) and secondary (from scrap) output are expected to be higher in 2022 and 2023. Primary production will benefit from the increased supply of concentrates and expanded SX-EW capacity and secondary output from an expected improvement in the availability of scrap and additions to secondary refinery capacity.

World apparent refined copper usage is expected to increase by about 1.9% in 2022 and 2.8% in 2023:

  • 2022 world usage growth was revised down to 1.9%. This was due to a weaker global economic outlook mainly as a consequence of the Russia-Ukraine situation and the negative effect COVID-19-related lockdowns in China are having on the country’s manufacturing activity.
  • Chinese apparent refined usage is expected to grow by about 1% in 2022.
  • World refined copper usage is expected to increase by about 2.8% in 2023 on the basis of a general improvement in manufacturing activity, mainly in China, and continued growth in the key copper end-use sectors.
  • Copper is essential to economic activity and the modern technological society. Additionally, infrastructure developments in major countries and the global trend toward cleaner energy and electric cars will continue to support copper demand in the longer term.


World refined copper balance projections indicate a surplus of about 140,000 tonnes (t) for 2022 and 350,000 t for 2023:

  • ICSG recognizes that global market balances can vary from those projected owing to numerous factors that could alter projections for both production and usage. In this context it can be noted that actual market balance outcomes have on recent occasions deviated from ICSG market balance forecasts due to unforeseen developments.
  • In developing its global market balance, ICSG uses an apparent demand calculation for China that does not take into account changes in unreported stocks (State Reserve Bureau [SRB], producer, consumer, merchant/trader, bonded), which can be significant during periods of stocking or de-stocking and which can markedly alter global supply-demand balances. Apparent copper demand for China is based only on reported data (production + net trade +/- SHFE stock changes).
  • ICSG expects a small surplus for 2022 of around 140,000 t. A larger surplus of about 350,000 t could be expected for 2023 when more supply is expected to come on steam.

 

ANOTHER REPORT

The “Copper Market – Growth, Trends, and Forecast (2020 - 2025)” report has been added to ResearchAndMarkets.com’s offering. The market for copper is expected to grow at a CAGR of more than 6% globally during the forecast period, according to the report. 

Copper is the third most-consumed metal in the world and is also known as a highly electrically conductive material. The electronics segment has a strong relationship with copper and copper is being used for many applications because of its properties. 

Recently, the growth of electrical vehicles has increased the demand for copper. Foils, stator, rotor, shaft head, hollow wires, and motors are being used in electrical vehicles that consist of heavy copper. 

Many companies have shifted to copper by replacing aluminum in producing robots internal parts, high-speed computers, home appliances, and telecommunication applications. The growth of these segments in developing economies has increased the demand for copper in recent times. 

But, the impact of COVID-19 resulted in lockdown in industrial activities across the globe. Due to this, the production of electronics has been stopped temporarily in many countries. Also, the mining of metals, including copper has slowed down in 2020. These reasons are expected to decrease the demand for copper in short term. 

Asia-Pacific is expected to dominate the global market owing to the highly developed construction and power generation sectors in China, coupled with the continuous investments done in the region to advancements in the telecommunication, electronics sector through the years. 

  • China, Japan, and South Korea have been investing a lot in the technology development processes such as robots, supercomputers, high power generation units, electric vehicles, and communication devices.
  • China is one of the largest consumers of electricity. In March 2019, the National Development and Reform Commission (NDRC) of China approved 224 solar and wind energy projects to deliver a total combined capacity of 19.29 GW, as well as a further 1.47 GW of renewable distributed energy resources (DER) trading pilot programs.
  • The demand for copper is high from Asia-Pacific as countries such as China, Vietnam and Korea possess a large base of production units that includes home appliances and mobiles, which are also largely exported to other regions.
  • However, the recent COVID-19 pandemic, which originated in China, has tremendously impacted the Chinese economy with trade disruptions. China, one of the largest exporters of goods, has witnessed a massive decline in trade, due to lockdowns in various parts of the world. The decline in investments is likely to restrain the growth of the market until 2021.
  • Post-2021, the market is likely to grow for the rest of the forecast period.

Copper 

COPPER PRICES

According to a report from the International Bank for Reconstruction and Development/World Bank, copper prices reached an all-time nominal high of $10,845/mt in early March. Prices have been buoyed by low inventories and solid demand in China and advanced economies stemming from robust durable goods consumption. The copper market has been affected by water shortages in Chile and labor disputes in Peru. Copper prices are projected to increase by 8% in 2022 as constraints in Chile and Peru persist, and as one of China’s major smelters is facing credit issues. Prices are expected to ease in 2023, however, as new projects come online, including in Chile, the Democratic Republic of Congo, Mongolia, and Peru. 

Upside risks to the outlook include further supply disruptions in Russia, while a more severe slowdown in global growth poses the greatest downside risk. In the longer term, copper will increasingly benefit from growing demand in the renewable (mainly photovoltaics) and electric vehicle (EV) sectors, as well as related grid and recharging infrastructure. In particular, the decision by European countries to reduce their dependence on Russian natural gas could increase copper consumption if it causes them to accelerate investment in renewable energy.

 

Copper2SUPPLY AND DEMAND

The International Wrought Copper Council (IWCC) has completed its six-monthly review of the copper market and has finalised its forecasts for copper supply and demand. 

The supply side data indicates that in 2022, mine output is expected to be 21.9 million tonnes (Mt), up 5.3% compared with 2021. For 2023, a 5.7% increase in copper mine production is forecast. Refined copper production in 2022 is forecast to be 24.75 Mt, up 2.1% compared with 2021, and might be 25.87 Mt in 2023. The IWCC wishes to thank the International Copper Study Group (ICSG) for its assistance in preparing the supply forecasts. 

The demand side forecasts were prepared by the IWCC. Global reported refined copper demand in 2021 was 24.40 Mt, up 5.0% on that for 2020. For 2022, the forecasts suggest that refined copper demand might be 24.725 Mt, up 1.3%. For 2023, demand for refined copper might increase by 3.0% to 25.467 Mt. 

In the EU-27+UK region, demand for refined copper in 2021 was 2.95 Mt up 5.1% compared with 2020. Demand in 2022 is forecast to be 3.095 Mt, up 4.9% compared with 2021. An increase of 1.3% is forecast for 2023, taking demand in that year to 3.134 Mt. 

In China, the IWCC estimates reported (or real) demand for refined copper in 2021 to have been 13.062 Mt. For 2022, the forecast currently suggests that reported demand for refined copper might be unchanged. For 2023, reported demand is expected to increase by 4.0% to 13.580 Mt. 

In Japan, refined copper demand in 2021 was 929,000 t. The forecast for 2022 indicates that demand might increase by 2.2% to 949,000 t, followed by an increase of 1.2% in 2023. 

In North America (Canada, Mexico and the USA) refined copper demand in 2021 was 2.306 Mt. The latest forecast suggests that refined copper demand for this region in 2022 might increase by 4.1% to 2.4 Mt with a further increase of 2.3% forecast for 2023. 

The forecasts for supply and demand suggest that in 2022 and 2023 the statistical balances, i.e. the difference between supply and demand of refined copper, are expected to be in balance. 


PROJECT SPOTLIGHT

Copper producer Austral Resources Australia Ltd. announced that the first Anthill copper cathode has been produced, successfully completing an intensive mine development and plant commissioning since listing eight months ago. This paves the way for Austral to meet its stated objective of producing copper cathode at a rate of 10,000 tpa from mid-2022.

This production milestone is of huge significance for Austral. It concludes an intensive eight-month period where the Anthill Mine was developed from a bare paddock into a fully integrated mine and the Mt. Kelly plant was refurbished and commissioned. 

Production statistics are impressive: 

  • 8.5 Mt of overburden has been moved at Anthill since January.
  • 354,000 t of oxide ore has been mined, representing over 4,000 t of contained copper.
  • Over 70,000 t of Anthill ore has been stacked on the heap leach and is producing copper.
  • Positive mine grade reconciliation to date.


The most important aspect is that the operation is de-risked and comfortably ramping-up to design capacity of 10,000-tpa cathode. With that comes increased sales revenue and cashflow. 


Exploration and development activities are being scaled up to discover and deliver new copper ore. The MIM JV is a significant step to increasing exploration efforts – with a seasoned regional explorer that has operated in the district for decades. 


Cyprium Metals owns a portfolio of near-term development projects located in Western Australia. The company is focused on near-term development of its Nifty open pit heap leach copper strategy to produce LME grade A copper cathode on site.

  • 25,000-tpa copper cathode operation including heap leach retreat and oxide open pit.
  • 146,100-t copper plate produced during Phase 1 oxide pit, 6.3-year life.
  • Phase 1 oxide pit only consumes ~10% of the Mineral Resource Estimate.

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