The consensus among analysts of key institutions and banks is that the copper market will be moving towards a deficit in the coming years due to the limited rate of growth in mining production combined with a stable growth of global copper consumption. Several years of a downward trend in the commodity market, deceleration in the growth of the largest metal consumer (China), decreased interest among investors in commodity markets and the lower propensity of banks to finance mining projects have resulted in no major new capital expenditure projects being initiated in the copper mining sector. The implementation of mining projects takes from a number of to several dozen years, so even if capital expenditure in the mining sector increases in the immediate future, the number of new mines opened in the next five years will still be limited. As a result, the anticipated growth of the global copper supply will decelerate and fall behind the consistent growth in copper consumption.

Forecast of the growth rate of copper mining production in 2016–2021 (in k ton)

Source: reports of banks and institutions, own data

The rate of growth in the demand for copper will be lower than in a period of intensive growth of the Chinese economy, but it will be stable. In addition to infrastructural projects and progressive electrification of the world, the demand for copper will be supported by the development of new technologies, investments in energy from renewable sources and innovations in the transport sector. The International Copper Association estimates that the manufacture of products based on renewable energy sources requires from four to twelve times more copper compared with traditional applications based on conventional fuels.

Forecasts of the copper market balance (kt)

Source: Reports of banks and institutions, own data