After hitting a new record of $4.88 a pound on May 10, London Metal Exchange cash copper prices are expected to average $4.20 a pound in 2021 and $3.96 a pound in 2022, according to CapitalLight Research's latest monthly, Key Metals for a Sustainable World.
The Toronto-based research house noted that "trend copper prices must remain well above long-term 'incentive levels' to justify new mine development", or about $3.50 a pound.
World copper demand will grow 3.8 percent to about 25 million tons in 2022, the report said.
While red metal supply in the coming years will be supported by new copper mines such as Ivanhoe's Kamoa Kakula in the Democratic Republic of Congo, Mina Justa in Peru and Timok in Serbia, as well as new projects under development, Teck Resources' Quebrada Blanca Phase II project, for example, predicts that "the current wave of mine expansion will peak in 2024, with a significant shortfall in required mine supply expected in the second half of this decade."
The report also noted that "copper demand for renewable energy projects, energy storage and electric vehicles could double to 8.5 million tons by 2025," and noted that "unlike in recent years, prices will be driven less by short-term macroeconomic developments in China and more by rising demand related to global decarbonization."
