Global refined copper consumption will register steady growth over the coming years, driven by demand from the power industry, rising electric vehicle (EV) production and a positive global economic growth outlook, a new copper supply and demand outlook by Fitch Solutions shows.

Fitch forecasts that global copper demand will increase from 23.6mnt in 2018 to 29 .8mnt by 2027, at 2.6% annual growth.

But the global copper market will see persistent undersupply in the coming years, as global consumption, driven by China's power and infrastructure sectors and increasing EV production, continues to outpace supply growth, Fitch warns.

Based on Fitch’s data, global refined copper demand will outpace production and the market will be in deficit over the next few years. Fitch specifically forecasts the global refined copper balance to register a deficit of 247kt in 2018, and to remain under-supplied through to 2021.

Mining companies are searching worldwide for copper projects amid the forecasts that demand for the red metal will significantly outstrip supply from 2020 (there are 300kg of copper in an electric bus and nine tonnes per windfarm megawatt).

That is the short-term forecast, but over the long term, Fitch expects the global copper deficit to shrink, and predicts that the market will shift to oversupply, as copper producers invest in new projects and output increases.

China's refined copper production is expected to maintain steady growth as producers take advantage of elevated prices, and Fitch predicts China remains a driver of global copper production growth, to increase copper production from 8.8mnt in 2018 to 11.4mnt by 2027, averaging 3.1% annual growth, and that China's copper producers will prove more profitable than foreign competitors, supported by strong domestic demand. In the short term, Fitch expects China’s economy to cool gradually in 2019 due to softening investment activity as credit and fiscal spending growth slows.

Click here to continue reading...

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

Part of the Stock Digest family of websites

Small Cap Stock Digest

MARKET SUMMARY

INDICES

Name Last Change
DOW 25502.30 1.80%
S&P 500 2800.71 1.93%
NASDAQ 7642.67 2.57%
TSX 16089.33 0.96%
TSX-V 637.82 0.00%

Resource Commodities

Name Last Change
Gold 1313.44 0.96%
Silver 15.44 0.13%
Copper 2.84 0.060
Platinum 846.28 0.000
Oil 59.04 1.59%
Natural Gas 2.75 2.47%
Uranium 25.88 0.46%
Zinc 1.32 0.00%

@RSDigest ON TWITTER