Copper prices racing to all-time highs and treatment and refining charges (TC/RCs) plunging to their lowest levels on record suggest a market under intense strain.
There could be opportunities for miners and recycled copper producers, while smelters face serious challenges. We take a deep dive into the disruption reshaping the copper market.
We will explore:
- How copper demand growth is being spurred by the energy transition
- Copper production forecasts and the struggle to keep up with demand
- Copper recycling and predictions for the future
- Data on forecast copper deficit
- The emerging challenges for copper smelters
- Whether current copper trends can be sustained
Find out more about Fastmarkets’ short- and long-term forecasts services for the copper market.
1. Copper demand growth supercharged by energy transition
Apparent refined copper demand will rise at a compound annual growth rate (CAGR) of 2.6% to reach 35.1 million tonnes by 2034, up from 26.5 milllion tonnes in 2023.
Consumption from energy transition industries (solar energy, wind power, electric vehicles (EVs) and EV charging infrastructure) will rise at a CAGR of 11.2%, far outpacing consumption from traditional sectors with a rise at a CAGR of 1.4%.
Within energy transition demand, the electric vehicle (EV) sector’s copper consumption will rise at a CAGR of 13.7%, accounting for 55% of the energy transition total.
Demand from the wind power sector will rise at a CAGR of 11.2%, while solar demand will rise at a CAGR of 6.1%.
2. Copper production can’t keep up
Copper production from all sources will grow at a CAGR of 2.2% in the next 10 years to 2034, underperforming demand growth of 2.6%.
We forecast concentrate production to rise at a CAGR of 2% after disruption allowances, reflecting a relative lack of investment in major new mines in the past decade, higher capital costs, falling average ore grades, policy risks and ESG complications.
3. More copper will be recycled
We forecast that elevated prices, increased focus on sustainability and investments in new recycling capacity will result in a wave of sustainable growth in secondary copper production over the next decade.
Refined copper production from secondary sources is forecast to rise at a CAGR of 4.9% between now and 2034.
4. Looming copper deficit
We forecast a global refined copper market deficit in 2024, mainly as tightness in the concentrate market restrains refined output.
For the rest of the decade, the market will alternate between periods of temporary surplus and deficits, but with supply shortfalls increasing from around 2030 due to a lack of new mines. By 2034, we forecast that the market will need an additional 1,364,000 tonnes of copper per year.
5. Copper smelters face tough challenges
Supplies of copper concentrates are expected to remain in significant deficit in 2025. That means smelters will face even more severe raw material challenges from next year.
Market participants expect low TC/RC numbers for 2025’s contractual supply talks, which usually kick off every November, due to sustained supply shortages of copper concentrates.
Copper smelters are likely to reduce output to stem losses incurred by the hefty cost of copper concentrates – their key feedstock.
6. Current trends unsustainable – something must change
The current outlook for ballooning supply deficits is not sustainable and something will have to give.
There are plenty of downside risks to the demand outlook that may reduce future copper consumption. For example, the pace of the energy transition may slow targets, cutting copper demand.
Macroeconomic factors, such as higher-than expected inflation or lower growth may hit future copper demand.
Substitution pressure will grow, accelerating opportunities to replace copper in some applications. For example, aluminium can replace copper in some cabling.
On the supply side, there are upside risks that may raise the growth trajectories currently forecast.
Higher prices will allow orebodies to be mined for longer, extending mine lives, while faster-turnaround brownfield mine expansions will be prioritized over greenfield mine projects that have far longer lead times, higher costs and greater risks.
Improved technology can also help, with processing enhancements to improve mine and smelter recoveries.
Inform your copper strategy with metals price forecasts and analysis for the global copper industry. Contact us today to find out more about our copper long-term forecast.
