Experts expect good prospects dictated by post-covid-19 economic stimulus plans | Copper market
After the coronavirus pandemic, experts are looking at growing demand for copper around the world. According to Fitch Solutions, global demand for copper is expected to grow from 23.6 million tonnes in 2018 to 29.8 million tonnes by 2027. This would imply annual growth of 2.6%. Currently, copper is trading around $ 6,500 per tonne. It was at $ 6,442 on Friday against $ 4,684 on March 16, its annual low, which represents a rebound of 37.5%, according to data from BFM Bourse.
Experts base these forecasts in particular on the expected jump in copper consumption by the electricity industry, especially in China and the growing adoption of electric vehicles as well as the generally positive outlook for the world economy, according to BFM Bourse who interviewed John Plassard, expert at the Mirabaud Securities consulting firm. This specialist cites in particular the European recovery plan and the incentive to purchase electric vehicles, the launch of an American infrastructure plan – Joe Biden has promised, if he were to be elected, the greatest mobilization of public investment in procurement, infrastructure and R&D since World War II – and increased aid from the Chinese state in favor ofindustry.
Copper “is present in many alloys”, used in particular in radiators and heat exchangers. In addition, “its good electrical conductivity (the best among non-precious metals) and thermal conductivity makes it a material of choice in telecommunications, construction, transport and even the energy sector” lists John Plassard. “Integrated circuits and printed circuits have (also) more and more copper” he adds, confiding in BFM Bourse.
Not only is copper also found in multiple applications in industry, it is also a material of the future and “should benefit in the medium term from the proliferation of wind turbines and the standardization of electric cars, both of which are very greedy in red metal. “says John Plassard. A thermal vehicle (gasoline or diesel) contains about 23 kg of copper against 40 to 60 kg for an electric vehicle (and even between 40 and 83 kg according to a study by the International Copper Association dating from April 2018), mainly for the wiring electric. “However, the electric vehicle market could be multiplied by 8 or 9 over the next few years, thus increasing the world demand for copper by nearly 7% by 2027”, according to the expert.
This should reassure the miners of the Democratic Republic of Congo. Mining companies overall produced 765,533 tonnes of copper at the end of June 2020 in the DRC, according to statistics provided by the Central Bank of Congo. This production is up 13.38% compared to the production volume achieved during the same period in 2019, i.e. 675,157 tonnes of copper.
During 2019, the DRC’s mining industry produced 1,420,386 tonnes of copper, an all-time record, against a volume of 1,225,227 tonnes in 2018.
