India and Asia will drive global copper growth beyond 2025, with China remaining a dominant consumer of the red metal, according to a Latin American commodity analyst.
Santiago-based CRU Consulting Principal Analyst, Mr Erik Heimlich, said while there were some short and medium term challenges for the metal, including some current misconceptions on pricing and impacts of the US-China trade tensions, the longer term outlook was robust.
“This will see output coming through from the mines approved for development in the past 12 months – where not much additional capacity was coming to actual market – and the spate of copper mergers and acquisitions will add price improvement as worthwhile assets get better attention and investment,” Mr Heimlich said.
“By 2025, we will start to see the first real volumes of copper use in electric vehicles, and this could absorb an additional one million tonnes a year by then.
“Expect this specific EV market demand to rapidly increase to 5 mtpa.”
Mr Heimlich said that while there would be a slow-down in medium term copper growth, China would still represent the most important copper demand growth in the next five years.
“We will need to see the rest of the world grow its copper consumption more rapidly and the contribution to that of India and Asian countries will be important.
“I expect 12 per cent of new demand in this period to come from India and around 10 per cent from ASEAN countries – stabilising copper growth globally at around 2 per cent a year over the next four years.”
Mr Heimlich said while copper prices had fallen below the US$6/lb level, they were in much more balance than the overall market believed.
*Article published in the July-September 2019 issue of The Asia Miner