Pandemic to worsen copper glut in coming months
A report from insiders in the market shows that the global surplus of copper that is currently being manufactured will deteriorate in the next 15 months as market turmoil has created greater uncertainty in the factors affecting the supply and demand of the metal.
The International Wrought Copper Council (IWCC), which represents copper and copper alloy producers, said that due to coronavirus-related interference, this year's supply is expected to exceed demand by 285,000 tons. The industry agency said that by 2021, this number may increase to 675,000 tons.
The IWCC predicts that the global copper surplus will reach 285,000 tons this year and 675,000 tons by 2021. Unlike gold, which is considered a safe-haven asset, copper is still largely constrained by supply and demand. During the coronavirus pandemic, the supply and demand of red metals continued to be severely affected due to the closure or downsizing of mines and global economic growth projections shelved. On May 19, metal prices hit their lowest level since January 2016, and the three-month copper on the London Metal Exchange (LME) hit $ 4,371 per ton. This is down from a high of about 6,340 dollars per ton in mid-January.
It is estimated that the refined copper output will reach 24.3 million tons by 2021 and will reach 23.625 million tons of demand This year's refined copper output is expected to be 22.91 million tons, while demand is 226.25 million tons. It is expected that the output in 2021 will climb to 24.3 million tons, with a demand of 23.265 million tons. In China, the world's largest metal consumer, demand for refined copper will decline by 2.8% this year to 11.87 million tons. According to IWCC data, demand will increase by 2.6% in 2021 to 12.175 million tons in 2021. In Europe, refined copper consumption is expected to decline by 6.4% by 2020 and then increase by 5.4% next year to 2.927 million tons. In North America, refined copper demand this year is expected to decline 6.9% to 2.223 million tons, and then achieve a 5.3% growth in 2021. The IWCC ’s estimates are based on publicly available information and input from the global research and marketing agency International Copper Research Group (ICSG).
