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Emerging Markets to Fuel Copper Demand Surge by 2030, Analysts Predict

17 Nov 2023 10:29 am
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Mumbai, 17 Nov (Commoditiescontrol): As China's once-dominant copper consumption begins to stabilize, India and Southeast Asian nations like Thailand and Vietnam are poised to become the new growth engines for the global copper market. This shift is anticipated to be significant by 2030, according to industry specialists.

Craig Lang, a CRU analyst, highlighted at the World Copper Conference Asia that these regions are expected to contribute significantly to global copper demand. Between 2023 and 2028, Southeast Asia and India are projected to drive 20% of global refined copper demand growth, potentially rising to 60% in the longer term.

The underlying drivers for this increased demand include rapid urbanization, investments in green energy transition, and consumption growth linked to the burgeoning populations in these areas, which together near 2 billion people.

Motoki Makita, General Manager at Mitsui & Co, underscored this trend by projecting a dramatic increase in copper cathode demand in Southeast Asia. By 2030, demand is expected to more than double to 2.8 million metric tons, up from 1.3 million tons last year. Specific projections for 2024 include Thailand consuming 380,000 tons, Vietnam 305,000 tons, and Malaysia 290,000 tons.

India's copper import needs are also set to rise sharply, from 100,000 tons in 2025 to 350,000 tons in 2030. This surge is anticipated to outpace the additional output from the upcoming Adani smelter.

While India and Southeast Asia's copper consumption currently represents a small fraction compared to China's, their growth compensates for the slowing demand in the world's largest copper consumer. China's copper consumption soared nearly fivefold over the past two decades, fueled by its super-cycle of growth. However, as the Chinese economy matures, the rapid expansion in construction and manufacturing sectors has moderated.

Nevertheless, China's copper demand is expected to remain robust, driven by the renewable energy and electric vehicle sectors. Consumption in these areas could triple by 2030, reaching 7.7 million tons.

On the price front, CRU's Lang forecasts a rise in the LME three-month copper price to $9,088 a ton in the next year, potentially reaching $12,350 by 2028 due to a long-term supply shortage. The global refined copper market is predicted to experience fluctuating supply dynamics, with a small deficit in 2024, temporary surpluses in 2025-2026, and a significant deficit anticipated from 2027 onwards.

Lang bases the 2024 deficit projection on an expected economic rebound in Western countries. Conversely, Mitsui's Makita anticipates a surplus in the global copper market for 2024 and 2025, with a shift to a deficit from 2027 to 2030 as supply peaks in 2026.

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