According to foreign media reports, just two weeks ago, the market was expecting a copper glut in 2024. However, this expectation is facing serious challenges as problems in the mining sector highlight supply vulnerabilities. Whether it's the closure of mines due to political and social opposition, the difficulty of developing new businesses, and the daily challenges of extracting ore underground, the global supply of copper has suddenly become scarce.
Recently, one of the world's largest copper mines (Cobre in Panama) has been ordered to shut down by the government, while a series of operational setbacks have forced a leading miner (Anglo American) to slash its production forecast. These events have led to a sudden disappearance of global copper supply expectations of about 600,000 tonnes, meaning that the global copper market will move from a significant surplus to a balanced or even a shortage.
This change is a major warning for the future energy transition. Copper is the core metal needed to decarbonize the global economy, which means that copper plays an important role in the green energy transition. As a result, supply shortages could have a significant impact on the development of renewable energy infrastructure.
Copper prices are likely to get a boost as concerns grow about supply shortages. A Jefferies research report says we may be at the foot of the next copper upcycle as production disruptions increase significantly and market shortages become more likely.
In summary, the risk of a global copper supply shortage is rising, with a potential supply shortage in 2024. This change could have a significant impact on the copper market and the global energy transition.
