Global copper demand will continue to rise in 2019. According to the latest analysis from Fitch Solutions the market is under supplied with demand set to increase from 23.6mnt in 2018 to 29.8mnt by 2027 - at 2.6% annual growth.
Fitch warns that global consumption, driven by the EV revolution and increasing demand from China’s power and infrastructure sectors, will continue to ramp, surging ahead of supply growth.
Global copper mine production will see steady growth over the next few years, supported by markets with low operating costs and improving copper prices. Fitch forecast that global copper production to increase by an average annual rate of 3.6% over 2018-2027 as a number of key new projects and expansions come online. In terms of volume, Fitch expect global copper output to climb from 20.4mnt in 2018 to 28.1mnt by 2027. Rising copper prices in the coming years will incentivise project development, particularly in key countries such as Chile, Peru and Australia.
Chile will remain a global leader in sustainable mining initiatives, supported by well-established mining industries, stable operating environments and commitment to clean energy. Miners will increasingly switch to seawater, instead of scarce freshwater sources, and increase renewable energy use, leveraging Chile's significant solar and wind power capacity. Codelco and BMW have announced the 'Responsible Copper Initiative', aimed at improving the commitment to ecological and social responsibility in the copper industry.
Fitch predicts Peru's copper sector will see steady production growth over the coming years, supported by a strong project pipeline, competitive operating costs and rising copper prices. The country's copper output is forecast to increase from 2.5mnt in 2018 to 3.8mnt by 2027, averaging 4.7% annual growth with Southern Copper driving the country's production growth.
Australia’s copper production is forecast to deliver 3.1% annual growth ramping from 938,000 tonnes in 2018 to 1.25mnt in 2027.
Fitch expects the global copper deficit to shrink from 2021, eventually shifting into oversupply as new copper projects come online.