India and Asia will drive global copper growth beyond 2025 with China remaining a dominant consumer of the red metal, according to a Latin American commodity analyst.
Addressing the Copper to the World conference in Adelaide, Australia, on Tuesday, Santiago-based CRU Consulting principal analyst Erik Heimlich said while there were some short- and medium-term challenges for the metal, including some misconceptions on pricing and impacts of the US-China trade tensions, the longer term outlook was robust.
“This will see output coming through from the mines approved for development in the past 12 months – where not much additional capacity was coming to actual market – and the spate of copper mergers and acquisitions will add price improvement as worthwhile assets get better attention and investment,” Heimlich said.
“By 2025, we will start to see the first real volumes of copper use in electric vehicles (EVs) and this could absorb an additional one-million tonnes a year by then,” he said, noting that EV-specific demand would rapidly increase to five-million tonnes a year.
Heimlich said that while there would be a slowdown in medium-term copper growth, China would still represent the most important copper demand growth in the next five years.
“We will need to see the rest of the world grow its copper consumption more rapidly and the contribution to that of India and Asian countries will be important.
“I expect 12% of new demand in this period to come from India and around 10% from Association of Southeast Asian Nations countries – stabilising copper growth globally at around 2% a year over the next four years.”
Heimlich said while copper prices had fallen below the $6/lb level, they were in much better balance than the overall market believed.