Copper is a metallic element that is malleable and ductile. It is a great heat and electrical conductor. Copper is antimicrobial and corrosion resistant. Copper is crucial to a sustainable future because it enables e-mobility and renewable energy sources, accelerates green buildings, electrifies cutting-edge power networks, and reduces hazards in hospitals through antimicrobial surfaces.
As a result, an increase in copper demand in the future years is projected to fuel the expansion of worldwide mined and refined copper output. The global mined copper market by production is expected to reach 24.48 megatons in 2023, growing at a CAGR of 4.5% over the projected period. Similarly, refined copper market by production is expected to reach 28.04 megatons by the year 2023 progressing at a CAGR of 4.0% during the forecasted period. On the other hand, the global copper consumption is estimated to reach 27.60 megatons in 2023, growing at a CAGR of 2.3% during the forecasted period.
In Asia, companies are spending funds on expansion exploration activities to increase copper mine production. Also, significant investment in capacity in Indonesia is expected to boost copper production growth over the outlook period. High global copper prices and rising demand are reigniting investment in exploration in Africa’s copper hotspots, with the DRC and Zambia both attracting significant capital funding. These factors are expected to further increase copper production in Africa.
In Asia, refined copper production has been examined based on the following regions: China, Japan, India, and Rest of the Asia. India is expected to experience the fastest growth, with highest CAGR in the coming years. Moreover, African government is taking several initiatives which are supporting domestic smelting capacity and mining output, which are likely to help in the growth of African copper production during the forecasted period. African refined copper production has been examined based on the following regions: DRC (Democratic Republic of Congo), and Rest of the Africa. DRC held the largest market share of refined copper.
Top Impacting Factors:
Driver: Rising Copper Annual Capacity in Renewable Energy
The generation of renewable energy sources is growing faster, particularly solar and wind farms that use much larger volumes of copper than conventional thermal power generators. The renewable energy sector has chosen to use copper in solar and wind farm applications, rather than inferior conductive materials because it is the best nonprecious conductor of heat and electricity, which is essential to the efficient generation and delivery of electricity. As the use of copper in solar and wind sectors is growing, it is leading to the rising annual capacity of copper in renewable energy, which is likely to promote the growth of the global copper market.
Demand for copper has increased dramatically over the last few decades. At present, the global average copper ore grade for copper mines is approximately 0.62% of Cu content and this number is expected to decrease as mines with higher ore grades become exhausted. The concern over the future availability of copper is on the rise. With the gradual decrease in the grade of copper ores, copper concentrates have become more complex with higher impurity and gangue content. This could have a detrimental effect on smelters as they have to increase throughput to maintain copper metal production, while increasing operating costs due to processing the increased amounts of secondary products (slag, acid) and stabilizing waste streams, affecting the overall copper mine production and thereby hindering the copper market.
The global copper consumption in passenger EVs and the global copper consumption in passenger ICEs cars is increasing. Copper is used in every major component of EVs and ICEs cars, from the motor to the inverter and the electrical wiring. However, EVs would use more copper as compared to the ICEs cars in coming years, due to the growing size of their market. As there are no viable alternatives to copper, its consumption is expected to grow faster in EVs, as compared to ICEs cars, during 2020-2025, which is likely to help in the growth of the global copper market globally.
The COVID-19 Analysis:
Copper mine production around the world dived in the first half of 2020, as the pandemic disrupted operations and metal demand patterns. Production cut in the copper mines due to the restriction on mining operations has significantly impacted the copper refining activities at factories. However, as the restrictions eased, the mines started opening which led to an increase in overall copper production in the year 2020. Additionally, global refined copper production climbed in 2020 as compared to 2019 despite brief smelter shutdowns for maintenance and upgrades affecting output in several nations, particularly due to an increase in copper production in China. Moreover, among the biggest copper-using regions, copper usage fell in Japan, the European Union, and the US, which led to a slowdown in copper consumption globally. However, global copper consumption increased due to higher demand from China’s construction sector.
Analysis of Key Players:
The global copper market is fragmented with many players holding an insignificant share of the market. The key players in the global copper market are:
Some of the strategies among key players in the market are mergers, acquisitions, and collaborations. For instance, in 2022, Codelco and Rio Tinto signed a collaboration agreement that would focus on the accumulated experience of both companies in the design, construction, and operation of underground mines. Whereas, BHP announced that the company would expand its presence in Peru as the company continues to increase its exposure to ‘future-facing’ minerals. Moreover, Codelco dominated the copper mine market with a share of around 7.9%. On the other hand, Codelco and Jiangxi Copper Company dominated the refined copper market with each company holding a share of around 5.3%.