Suzhou, Dec 7 (SMM)—Demand for copper has surged significantly in the past 20 years and is expected to rise further due to the surge in demand for electric vehicles, while global copper supply is likely to continue to shrink in the future, according to Paul Ward, Executive Head of Marketing, Base Metals, Anglo American.
Ward was speaking remotely to the China delegates as well as international participants in Suzhou on Friday December 4 at the Shanghai Metals Market’s 2020 Nonferrous Metals Industry Chain Annual Conference held in Kempinski Hotel Suzhou.
“According to the European Commission’s forecast, global middle class will increase from 3.5 billion in 2017 to 5.5 billion by 2030, and about 87% of the new middle class population will be in Asia. The region will play an import role in shaping the copper industry,” Ward said.
“In the past 20 years, world copper consumption has increased exponentially. This growth is led by China, while other Asian countries account for a smaller proportion. We expect this trend to continue,” he added. The emerging markets involved in the “One Belt, One Road” initiative in Asia and China will account for three-quarters of copper use, that is, 17 million mt of the 23 million mt in 2020.
Copper will be widely used in many fields, and if recycling and absolutely necessary activities are considered, the consumption will be much larger. “Recycling is not economical for business people. But copper, used in most of the end products, can retain its characteristics after repeated uses. However, copper recycling rate has dropped from 35% in 2010 to about 30% at present. We want to cooperate with the industry to achieve better results in copper recycling”, Ward said.
The surge in demand for electric vehicles is also expected to drive regional demand for copper. In the past few years, most of the electric vehicles have been sold in Asia, and China continues to lead electric vehicle production in the world and is expected to maintain its status in the next few years. In addition, China put forward an ambitious carbon neutral plan in the recent Fifth Plenary Session.
“The short-term and long-term challenges will be to meet this growing demand.” Global copper ore supply is expected to drop by 5% in 2020, and most of the production interruptions at copper mines were caused by temporary lockdowns or production cuts aimed to curb the spread of coronavirus in business premises.
Few new large-scale greenfield mines will be put into use in the next few years, and more and more people are calling for reducing the area of mines and factories in the future. Even without virus restrictions, copper mining is a challenging business due to water and power shortages. Affected by many factors such as climate change, technical challenges, capital costs and copper price fluctuations, demand continues to soar. “We predict that by early 2030s, copper supply gap will be as high as 9 million mt, and it is especially important to develop new and sustainable sources of supply,” Ward concluded.