Mumbai, 20 Aug (Commoditiescontrol): The global push towards decarbonization and the energy transition heavily relies on copper, a critical component in electrification efforts. As copper demand is expected to surge by 75% to 56 million tonnes by 2050, securing a stable supply of this essential metal becomes increasingly significant.
According to a recent report by Wood Mackenzie, while nations such as the U.S. and those in Europe are making efforts to diversify supply chains away from China, the reality is that China’s dominance in the copper supply chain is irreplaceable in the near term. China currently controls a significant portion of the global smelting and refining capacity and has made substantial investments in downstream processing sectors.
The report also highlights the growing importance of scrap copper as a crucial element in the supply chain. As environmental concerns and the need for sustainable practices increase, the direct use of scrap copper is becoming more prevalent, particularly in semi-fabrication processes outside of China. This trend is seen as a potential mitigating factor for supply risks, although it does not fully address the overwhelming dominance China holds in the market.
However, the report cautions that attempts to replace China’s role in the copper market could lead to inefficiencies and increased costs, particularly if scrap recycling alone cannot meet the rising demand. The global market must, therefore, adopt a pragmatic approach that involves collaboration with China, rather than a complete decoupling, to ensure a smooth and cost-effective energy transition. Failure to strike this balance could result in higher prices for finished goods and delays in achieving global climate goals.
(By Commoditiescontrol Bureau: 09820130172)
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