As investors looks past COVID-19 and anticipate a rosier economy in 2021, copper finished the year on an up note. In mid-December the red metal topped at $7,964 a tonne, an eight-year high.
Goldman Sachs is bullish. Its analysts say the current copper bull run could continue well into 2022, and the firm estimates that the metal is likely to hit $10,000 per tonne for only the second time in its history.
Metals strategist Nicholas Snowdon said “This current price strength is not an irrational aberration, rather we view it as the first leg of a structural bull market in copper.” But can copper mines keep up and what are the sources of new supply?
In 2020, copper production will drop. According to the industry experts, global copper supply will likely to fall by approximately 257,000 tonnes, a 1.2% decline compared to 2019, with most affected countries being Peru (14.5%), Australia (7.5%) and Mexico (4.5%).
However, the global copper mining industry is expected to increase copper output by 1.36Mt to 21.4Mt in 2021, with most of the growth coming from Peru (315,000t), Chile (175,000t), United States (112,000t) and China (82,000t).
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