A new snapshot by S&P Global predicts huge demand for copper but warns supply challenges could mean the world won’t be able to meet it.
And that could seriously undermine the race toward a net zero future by 2050 the report’s authors suggest.
We’ve been hearing these sorts of warnings for a while now, so its valuable—if a bit scary—to see it finally being quantified.
S&P forecast copper demand nearly doubling to 50M metric tons by 2035 and demand to hit over 53M metric tons by 2050. In S&P’s own words that’s “more than all the copper consumed in the world between 1900 and 2021.”
All the demand is being fuelled—as I think we all know by now—by things like electrification, clean energy & technology. What is new is that demand will hit levels never seen before.
The world is racing to develop and find new sources of copper of course. But when a new copper mine takes roughly 16 years to hit full production (not even counting all the time taken on exploration) you can see we have a problem.
S&P outline 2 scenarios, both not rosy. The “Rocky Road Scenario” where production doesn’t grow and the yearly supply shortfall is almost 10M metric tons in 2035. The second “High Ambition Scenario” sees rising production & recycling, but with the market still in deficit for most of the 2030s.
Not only will green economy efforts falter but S&P warn of a new “geopolitical order” as countries jockey for top copper supply positions. That could be good for Australia’s bottom line, but navigating highly competitive demand politics could pose a lot of challenges.
It’s definitely an interesting time to be in the copper business, but we need to be thinking strategically and long term.
Cheers, John Fennell