Current mined copper production combined with sanctioned projects, defined as shovel ready and advanced through the last 5-year period, point to a global copper supply shortage in the second half of this decade.
Significant near-term copper production potential is expected to come from the Pacific Rim, with Papua New Guinea set for a 10-fold increase in copper production, from 0.4% to 4.0% of total global mined copper (RBC Capital Markets Copper Outlook, January 2024).
Copper’s Structural Deficit – Copper demand is forecast to grow from approximately 25 million tonnes (Mt) in 2022 to 30 Mt by 2035, resulting in a 9-10 Mt copper supply gap (Wood Mackenzie, 2022; 2035 Copper Supply Gap, CRU 2023). After a decade of cuts to copper exploration and project development, copper producers and advanced-stage projects are expected to be insufficient to meet long-term demand expectations.
Copper Supply Disruptions – Production disruptions in major copper producing regions of Latin America and Africa, along with overall mine supply underperformance, led to a tighter 2023 copper market than forecast. Ongoing mined copper disruptions and underperformance in major copper producing regions of Central and South America, are understood to be contributing to the increase in copper prices during 1H 2024.
