Nornickel: Global copper demand will increase by 20% by 2035

According to foreign media on October 10, Russian nickel producer-Russian Norilsk Nickel Company (Nornickel) predicts that the global copper market will be generally balanced and will expand gradually. Due to the development of power transportation, power grids and renewable energy, copper demand will increase from 24.8 million tons in 2022 to 30 million tons.

At present and in the short term, demand growth appears to be constrained by the global economic slowdown, and despite the risk of supply disruptions in South America, copper production appears to be expanding at a pace sufficient to meet the market's short-term needs.

Peter Varyushin, head of commodity market research at Nornickel, told S&P Global Commodity Insights that the global copper market is expected to see a slight oversupply of 173,000 tons in 2023, and may see a shortage of 54,000 tons in 2024.

According to Nornickel, copper demand may increase by 2% year-on-year to 25.3 million tons in 2023. Due to the expected acceleration of China's economic activity, it may further increase by 3% to 26 million tons in 2024.

Nornickel predicts that global copper mine production will be 22.3 million tons in 2023 and 23 million tons in 2024, driven by increased production in South America and the Democratic Republic of the Congo; China's refining capacity expansion will boost global refined copper supply: output this year is expected to hit 2,550 million tons, and will exceed 26 million tons in 2024.

Varyushin noted that macroeconomic trends will have a cooling effect on demand.

First of all, due to the constraints of rising interest rates, global GDP growth may drop from 3.5% in 2022 to 3% this year, and may remain flat in 2024. Second, the market is no longer supported by the post-pandemic recovery, which is already exhausted.

Varyushin said that EU industrial production is on a downward trend, and there are also concerns about China's economic growth.

As for the company's long-term prospects, Varyushin said that the increase in the use of metals will be linked to the development of renewable energy and the electrification of transportation.

Copper consumption by batteries and hybrid electric vehicles and charging infrastructure could reach 4.7 million tons by 2030, doubling to 5.5 million tons by 2035, he said.

Nornickel data shows that by 2035, all the above-mentioned industries have the ability to generate additional demand of 5.4 million tons/year.