Demand for green copper to grow by an average of 13% per year over the next 10 years (Report)

As the pace and shape of the green transition quickly becomes one of the key themes in the global economy, copper will experience an increase in demand during the period 2021-2030, gaining a place on the material list.  

Currently, the demand for copper can be divided into three broad categories: building construction, infrastructure and manufacturing.

However, Fitch notes   , the demand profile for copper will change as decarbonization targets accelerate in 2021 and lead to much higher demand from the energy and automotive sectors.

Fitch  quantified the impact of the green transition on copper demand and subsequently revised upward its global demand assumptions.

Going forward,  Fitch  estimates that the green demand for the power and renewable energy sector as well as automobiles will each account for 7.9% of total copper demand by 2030. Estimates are based on Fitch’s forecast   ‘  s  Power & Renewable Energy and Automotive teams.

Due to a greater energy transition  , Fitch  predicts that green copper as a percentage of total copper demand will increase from about 5.6% in 2021 to 15.7% in 2030. Going from a forecast of 1, From 4 million in 2021 to 5.4 million in 2030,  Fitch  expects copper demand to average 13.0% year-on-year growth over the next 10 years.

The two most important areas of growth in demand for green copper: renewables and vehicle electrification.

The renewable energy sector will account for the strongest growth in demand for green copper during our forecast period, according to  Fitch  , as it consumes 12 times more copper than traditional energy systems. The renewable energy sector will represent on average 62% of the annual demand for green copper between 2021 and 2030 and about 7.9% of the total copper demand by 2030, compared to 5.1% estimated in 2020. However, note  Fitch  , its market share will shrink. as the production of electric vehicles continues to increase towards the end of the decade.

Renewable energy will be the main contributor to the green copper demand over  the  forecast period  Fitch  , averaging 62% of the annual demand for green copper between 2021 and 2030.

The renewable energy sector will drive demand for copper through significant net capacity additions in the wind, hydro and solar energy subsectors.

According to the Copper Alliance, wind turbines require between 2.5 tonnes and 6.4 tonnes of copper per MW for generator, wiring and transformers. Solar PV power systems use approximately 5.5 tonnes of copper per MW.

Fitch’s Power & Renewables team   believes the biggest addition of renewable energy capacity will occur in China, India and the United States.