Copper Prices Will Fall In 2022 Due To Rising Supply

IndexBox has just published a new report: ‘World – Copper – Market Analysis, Forecasts, Size, Trends and Outlook. Here is a summary of the main findings of the report.

The average annual copper price is expected to fall 6% year-on-year to $8,800 per ton this year. Boosting supply in the global copper ore market is tantamount to lowering prices, while global demand languishes with slowing construction activity in China.

According to World Bank October data and outlook, the average annual copper price climbed 51% year-on-year to $9,317 per tonne in 2021, but is expected to decline to around $8,800 per tonne this year. , as global production recovers from the Сovid crisis.

The forecast is shaped by increased supply of copper ore thanks to the launch of the Kamoa-Kakula mine in Congo, while global demand declines as construction activity slows in China. The owner of the mine, the Canadian company Ivanhoe Mines, has announced plans to increase production from 106,000 tonnes in 2021 to 340,000 tonnes in 2022.

World copper production

In 2020, global copper production fell to 20 million tonnes, down -2.3% from the previous year’s figure. In terms of value, copper production fell to $136.3 billion, estimated at export prices.

The country with the largest volume of copper production was Chile (5.7 million tons), accounting for 28% of total production. In addition, copper production in Chile exceeded the figures recorded by the second largest producer, Peru (2.2 million tons), tripled. The third position in this ranking was occupied by China (1.7 M tonnes), with a share of 8.3%.

World copper exports

In 2020, approx. 1.7 million tonnes of copper were exported globally, up 16% from 2019 figures. In terms of value, supplies jumped to $11.1 billion (IndexBox estimates).

Zambia was the world’s largest copper exporter, with an export volume of 675,000 tonnes, almost 40% of the total supply. Chile (283,000 tonnes) ranks second with a 17% share, followed by Bulgaria (7.1%) and the Democratic Republic of Congo (5%). Belgium (76K tons), Namibia (61K tons), Spain (56K tons), Slovakia (55K tons), South Africa (52K tons), Pakistan (38K tons), Philippines (34K tons) and South Korea (31K tons ) were far behind the leaders.

By value, Zambia ($4.2 billion) remains the largest supplier of copper, accounting for 38% of global exports. The second position in the ranking was occupied by Chile (1.7 billion dollars), with a share of 16% of the total supplies. It was followed by Bulgaria, with a share of 9.4%.

Source: IndexBox Platform