LONDON – Solid copper mine production from new or expanded operations is expected to push the market into surplus next year, before growth slows down in the second half of the decade.
Higher mining output plus additional supply from a stockpile in Congo could further weigh on prices CMCU3, which are already seeing pressure from weak demand and signs of a slowing global economy.
Benchmark prices hit their lowest since Jan. 6 this week.
Macquarie currently expects 2023 global copper mine supply to increase by 2.8 percent, or around 600,000 tons, due to project ramp-ups and higher output at some existing operations.
JP Morgan sees global copper mine production rising by 2.6 percent in 2023, inclusive of a 5.5 percent disruption allowance, which is higher than usual this year due to social unrest in Peru. Analysts typically factor in loss of production from disruptions at 5 percent of total mined copper supplies.
The growth is driven by two projects: Quebrada Blanca in Chile and Quellaveco in Peru, with some others approaching completion after delays caused by the pandemic.
Additional supply will push the copper market into a surplus of 298,000 tons in 2024 after a deficit of 114,000 tons in 2023, the International Copper Study Group (ICSG) said on Friday.
Another source of supply is from a large amount of copper stored at Congo’s Tenke Fungurume mine (TFM), which was not exporting the metal for eight months due to a dispute between its shareholders. – Reuters
