Glencore expects copper shortage amid demand for energy transition

The boss of Glencore, the Swiss commodities trading giant, expects a shortage of copper in the face of demand for renewable energy equipment and the rise of electric vehicles. 

Gary Nagle, who took over the group’s orders last year, expects a deficit of more than 50 million tonnes for copper worldwide over the next eight years, he predicted on Tuesday during a a conference for investors, due to the explosion in demand linked to the energy transition. 

To fill the gap, the group based in Baar, in the Swiss canton of Zug, is counting on the copper recycling sector, and not only on increasing production in its mines. 

“Over the next eight years, the world is going to need 100 million tonnes of copper just for renewable energy sources,” he quantified, with copper going into the manufacture of wind and solar equipment in particular. .

Added to this is a need for copper of around 19.4 million tonnes between 2022 and 2030 for electric vehicles, between cars, electric buses and charging stations, the boss of Glencore specifying that an electric vehicle could require up to “four times more” copper than a combustion engine vehicle for its manufacture and up to “five times more” taking into account the terminals to recharge it. 

However, supply will be insufficient to meet demand, he said. The global copper requirement between 2022 and 2030 should amount to 355 million tonnes including demand excluding the energy transition, while global production should rather be 304.5 million tonnes, showing a deficit of 50 .5 million tonnes over the next eight years, according to Glencore projections. 

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For 2023, the group has however lowered its copper production target to 1.04 million tonnes, against 1.06 million tonnes for 2022, due to “production challenges”, acknowledged its boss, in particular at its Katanga mine in  the Democratic Republic of the Congo .

On Monday, the group announced it would pay $180 million (€170 million) as part of a deal with the  Democratic Republic of Congo  to settle disputes over corruption charges.

With supply concerns at the start of the war in Ukraine, copper prices soared in March, hitting an all-time high on the London Metal Exchange at $10,845 a tonne.

But since this peak, its price has fallen by around 22% in the face of fears of recession and the epidemic situation in China, a large consumer of base metals. On Tuesday, copper traded at $8,415.50 a tonne on the London market.