Posted on 29 Dec 2023
Global copper demand growth has been robust so far this year, thanks to China’s strong demand despite challenges in its residential property sector, according to Australia’s industry ministry.
Refined copper consumption increased 8.4% year-on-year in the first 9 months of 2023 to 20.7 million tonnes, the ministry said in its latest Resources and Energy quarterly report seen by Kallanish. China led that growth, alongside other parts of Asia, helping offset around 12% fall in US copper consumption.
China’s infrastructure sector, particularly the clean energy industry, has been the primary driver for the country’s strong copper demand. So far in 2023, the nation has added around 150 gigawatts of additional solar and wind power generation capacity – equivalent to around 650,000 t of copper demand.
Global mined copper production, meanwhile, rose 2.9% in the January-September period to reach 16.5m t. It is expected to grow by 2.8% annually in the next 2 years, with the majority of it expected to come from Chile, the Democratic Republic of Congo and Russia. On the other hand, refined copper production has grown 7.3% so far this year to 20.4m t and is expected to increase around 0.7% annually through to 2025.
However, due to a poorer outlook for construction and manufacturing in markets such as Europe and Asia (excluding China), copper prices have fallen in recent months from a peak of $8,900/tonne in March, the report says.
“The weak global outlook (ex China) is expected to put downward pressure on copper prices in the near term,” it adds. “Lead indicators suggest further near-term vulnerability in global manufacturing, and in construction activity in key markets such as Europe.”
As a result, the Australian chief economist office predicts copper prices to average around $8,100/t in 2024, compared to around $8,200/t in the second half of 2023. The red metal is expected to increase to $8,500/t in 2025.
Despite lower copper prices in H2 2023, Australian copper export earnings are slated to rise 4.2% y-o-y to around AUD 12.8 billion in 2023-24. These revenues are expected to increase to $13.4 billion in 2024-25.
The country’s mined production is forecast at 868,000 t in 2024-25, with refined copper production set to reach 471,000 t in the period.
Source:Kallanish
