LONDON (Reuters) – The refined copper market will experience supply shortfalls both this year and next, the International Copper Study Group (ICSG) says. The group has in fact lifted its 2019 deficit assessment to 189,000 tonnes from a forecast 65,000 tonnes at its last biannual meeting in October 2018. Next year’s deficit is expected to be wider at 250,000 tonnes.
These are still marginal numbers given the size of the global copper market – 25 million tonnes – and prey both to statistical error and a highly changeable macroeconomic backdrop.
The rate of demand growth is a key variable and one that is very much to the fore as copper and other industrial metal markets eye nervously slowing global manufacturing activity and trade tensions between the United States and China.
Supply, by contrast, is more knowable and the key takeaway from the ICSG’s latest forecasts is the marked lack of new mine supply expected over the next year and a half.
NO GROWTH, LOW GROWTH
The ICSG is expecting mine supply to be “essentially unchanged” this year, up just 0.2% at 20.64 million tonnes. The world’s copper mines churned out 2.5% more metal last year thanks to what was by copper’s standards an unusually low rate of disruption.