Fitch Solutions has put copper on its “Commodities of the Future” Index, saying that the world’s ‘green transition’ will mean “a surge in demand over 2021-2030”.
Demand for copper will come from three broad categories of building construction, infrastructure and manufacturing, but Fitch says that green copper demand will increasingly come from the energy and automotive sectors.
They predict green copper as a percentage of total copper demand will jump from 5.6% in 2021 to 15.7% in 2030, meaning it will rise from 1.4mnt in 2021 to 5.4mnt in 2030—a 13% annual growth rate year on year for the next decade.
This is a big call. While I might question some of the forecasts as overly optimistic, the underlying story is accurate and it’s one we’ve been seeing playing out in the media for some time.
What’s interesting is the importance Fitch gives to the still fairly early days of electric vehicles and renewable energy, saying they will dominate by the end of this decade.
They are particularly upbeat about clean energy, saying it will represent 62% of annual green copper demand between 2021 and 2030, with China, India and the US in the lead.
The bottom line? The world’s acceleration of sustainability, decarbonisation and digitisation is upending old industries at a fast pace.
Copper is well placed to ride this wave of course, but the demand to rethink how we actually extract, produce and manufacture it is also here too. The copper industry will need to be a lot greener too. And that journey has already started !
Cheers, John Fennell
