Copper is the new oil…
As you may be aware, the copper markets are important to the cable manufacturing industry, so we have put together this post as we think you will also find it informative.
Mining industry professionals noted that copper prices have soared over the past few months due to a supply crunch, with analysts suggesting that global shortages are likely to continue to affect the market throughout the decade.
Numerous factors have contributed to the shortage in copper supply. These include increased demand, primarily driven by the reopening of China following the lifting of restrictive measures, efforts to transition to a greener economy, as well as increasingly challenging supply streams in South America. Peru’s copper mines were hit hard by protests last month, affecting exports to copper-intensive economies. It should be noted that the South American nation is the world’s second-largest copper producer, accounting for 10 per cent of the world’s copper supply.
However, political instability has seen a decline in the grade of copper, whose effects are already evident in Chile, the world’s largest copper producer, accounting for 27 per cent of the global supply. Chile recorded a drop in copper output due to lacklustre ore grades, reporting a year-on-year decline of 7 per cent in November, with analysts estimating that it will likely produce less copper within the next two years.
Against this backdrop, copper is expected to take on a bigger role over the next decade, putting a further strain on the current shortage which are increasing year by year.
It has been mentioned that the current shortage could last until 2030, reinforcing the need for additional sources for the sought-after mineral (copper).
What is more copper is set to undergo a generational shift in demand as decarbonisation efforts continue to increase, renewables will result in a greater demand, which means that copper metal price is bound to increase further.
Copper is typically used in the manufacturing of conductors as a component in the cable industry. Also, semi-conductors, and batteries for the electric vehicle market, but if we look at the decarbonisation net zero energy transition, copper is the new oil.
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