Global copper usage is likely to remain flat this year and grow by 3pc in 2022 as the world recovers from a demand weakness in 2020 due to the COVID-19 pandemic, according to the International Copper Study Group’s (ICSG’s) forecast on Monday.
China drives global consumption
In 2020, ICSG noted that global copper usage, ex-China, dropped by 9pc. Still, China’s consumption of the red metal increased by 13pc last year following a 38pc or 1.2mn mt increase in the country’s refined copper imports. This rise offset the steep declines in other regions, ICSG indicated, lifting overall global refined copper usage by 2.5pc in 2020 compared to the previous year.
This year, however, ICSG expects refined copper consumption in China to fall by 4.5pc despite a 7pc increase in usage ex-China. As a result, the overall global copper consumption will inch up only by 0.2pc. Consumption patterns across the world are likely to grow in 2022 driven by infrastructure projects in countries like China and India as well as a bigger thrust on cleaner energy and electric vehicles across the world.
Copper supply is expected to outpace demand despite the growing need for copper in various industries, according to the ICSG. As a result, the group expects a copper surplus of 80,000mt in 2021 and 110,000mt in 2022. However, it noted that this projection could be impacted by the length of the COVID-19 pandemic as well as other unforeseen circumstances.
Copper output set to rise
The red metal’s production from mines as well as refined copper production is set to grow over the next two years, ICSG noted, after it remained flat in 2020 against the previous year. Last year, restricted output from key copper-producing countries such as Indonesia and Chile because of the COVID-19 pandemic was offset by new projects and output growth in mines in the Democratic Republic of Congo (DRC), Russia, and Peru.
This year, copper output from mines is expected to rise by around 3.5pc before ticking up by 3.7pc in 2022 led by the start of major projects such as the Kamoa-Kakula mine in DRC, Quebrada Blanca (QB2) in Chile, Udokan in Russia, and Quellaveco in Peru. A ramp-up in these mines’ operations will give a further growth impetus for the metal next year.
Global refined copper output is also expected to increase by 3pc in 2021 as well as 2022 after growing by 1.6pc last year as China expands its refined copper production capacities and DRC brings in new refined copper volumes from the Kamoa-Kakula project. In fact, refined copper output in China will rise by 4pc in 2021 and 2022 because of the expanded capacities. As more scrap becomes available, refined copper production from scrap is also slated to grow over the next two years.