We forecast that copper demand will outpace supply by 2024, leading to a widening supply and demand deficit in the refined copper market and rising prices, Thomas Rutland, a commodities analyst at S&P Global Market Intelligence, said in a press release.
A Roskill report predicts that total copper consumption will exceed 43m tonnes by 2035, driven by population and GDP growth, urbanisation and electricity demand.
But total world copper production in 2020 will be 20m tonnes.
Demand is expected to outstrip supply in 2021, with a supply shortfall of at least 200,000 tonnes.
Fitch forecasts a shortfall of 489,000 tonnes in 2024, rising to 510,000 tonnes in 2027.
As analyst Rick Mills wrote in an earlier post, "Every year many experts say there is a surplus in world copper supply and demand, but that may not be the case."
Meanwhile, concerns about mining investment in South America persist, with one of Peru's leading presidential candidates proposing and wanting to apply the same copper tax as Chile's.
Copper prices surged on Thursday after unions at BHP Billiton's Escondida and Spence copper mines in Chile began striking, adding to the uncertainty about global copper supply in a cycle of rising prices when copper miners strike over labor contracts.
Codelco keeps production tight
Codelco, Chile's state-owned copper miner, issued a $2bn US dollar bond in January to fund its multibillion-dollar copper mine upgrade and refinance debt.
Chile, the world's No. 1 copper producer, has 10 percent of the world's known proven copper reserves and about 11 percent of the world's annual copper production.
Speaking on the sidelines of the CRU 2021 World Copper Congress, Codelco's chief executive, Ontario Araneda, said the company aimed to generate an additional $1 billion a year in profits through improved efficiency and productivity,
To secure the resources to implement $35 billion of structural changes and investments over the next decade.
Neil Hume, the FT's natural resources editor, wrote on Twitter: Codelco will be paying huge renovation bills for the mine it faces to keep production flat.
In January, Codelco approved a $1.383 billion underground renovation project at the Salvador Mine that will extend the life of the aging copper mine by 40 years and increase production by 30 percent.
The expansion will convert the Salvador Mine, which has been in operation since 1959, from an underground mine to an open-pit mine.
It is one of six major projects the Chilean mining company is pursuing to boost output from its depleted mines.
A strike at a BHP Billiton mine in Chile began
BHP Billiton's (BHPBilliton) Escondida and Spence copper mine workers' union in Chile went on strike for a second day on Friday and the company is using outsourced workers to ensure continued production, a union leader told Reuters.
The 200-member union runs BHP's integrated operations centre, which manages pits, cathodes and concentrators in San Diego from a remote location.
Union secretary Robert Robles told Reuters that union members would continue to demonstrate in Santiago.
At the same time, he said, the company is deploying contract workers at copper mines in northern Chile, which the union opposes.
The strike at Escondida, the world's largest copper mine, began on Thursday last week after efforts to secure a Labour contract with the company's management fell through, adding to the uncertainty about global copper supply.
The strike also marked the first of its kind for remotely operated Escondida workers, testing the company's resilience to industrial action in an era of automated or off-site work.
For its part, the powerful and larger Escondida field workers' union has expressed support for workers in remote areas and criticised recent Labour reforms that allow companies to temporarily replace staff during strikes.
"They have no right to an effective strike, a situation that affects the majority of workers in Chile," the union said in a statement.
The much larger union of field workers will also begin collective bargaining over a new contract in the coming weeks and has warned that they are preparing for a lengthy strike.
