Copper Supply and Demand. Copper Uses and AI.
AI
May 22, 2024
Copper is primarily used in electrical applications, which account for about three-quarters of its total use, including power transmission and generation, building wiring, telecommunication, and electrical and electronic products.
It is also extensively used in building construction, making it the single largest market, followed by electronics, transportation, industrial machinery, and various consumer and general products. Copper’s high ductility, malleability, thermal and electrical conductivity, and resistance to corrosion make it a crucial industrial metal.
Additionally, copper is readily recycled from manufacturing byproducts and obsolete products, contributing significantly to the overall copper supply.
2023 Production: 2,058,910.28 MT
2. BHP
2023 Production: 1,389,022 MT
3. Codelco
2023 Production: 1,347,200 MT
2023 Production: 1,147,300 MT
5. Antofagasta
2023 Production: 714,972 MT
6. Glencore
2023 Production: 695,750 MT
2023 Production: 614,278.5 MT
2023 Production: 561,815 MT
9. Southern Copper Corporation
2023 Production: 556,026 MT
10. Norilsk Nickel
2023 Production: 494,346 MT
Yes, copper is very valuable. Known as the “new oil” and “Doctor Copper,” its market price serves as a key indicator of global economic health.
The rising prices of copper scrap metal highlight its value, driven by its excellent conductivity of electricity and heat, which makes it essential for energy transfer, power generation, and electronics. Copper is widely used in construction, transport, and numerous other applications.
With demand increasing due to urbanization and technological advancements, recycling copper is crucial. Recycled copper, which made up 35% of the U.S. supply in 2019, helps meet this demand efficiently while reducing environmental impact and costs.
Top importers of Copper ores and concentrates in 2022
The world's largest importers of this commodity group in 2022:
China - 58% of the world imports ($56 billion)
Japan - 14.2% ($13.7 billion)
Korea - 6.84% ($6.57 billion)
India - 3.4% ($3.26 billion)
Germany - 2.76% ($2.65 billion)
In the United States, the industry that uses the most copper is construction, accounting for 43% of the total copper consumption. This is followed by the electric equipment industry, which uses 19% of the copper.
The International Copper Study Group (ICSG) has revised its forecast for copper supply and demand, highlighting a significant reduction in expected mine production growth and an adjustment in the projected supply surplus.
The 2024 surplus is now estimated at 162,000 metric tons, down from an earlier forecast of 467,000 tons, reflecting a closer alignment with demand in the 27-million-ton global market. This change is primarily due to slower mine production growth, now at 0.5%, influenced by delays and closures such as the Cobre Panama mine.
As a result, refined copper production growth for this year has been downgraded from 4.6% to 2.8%, with further reduction to 0.7% growth expected next year. Demand for refined copper is also expected to grow modestly at 2.0% this year, down from a previous estimate of 2.7%, and is forecasted to rise to 2.5% in 2025.
Despite the energy transition driving long-term demand, the short-term outlook remains cautious, with Chinese demand growth slowing and increased demand outside China. This nuanced forecast reflects current market dynamics, with investment interest driving prices up while physical buyers, particularly in China, show tepid engagement.
Copper is crucial for the future due to its versatile properties and essential role in modern and sustainable technologies. Its high electrical and thermal conductivity make it indispensable in electrical components, smart devices, building wiring, and telecommunications.
As the world transitions to net-zero emissions by 2050, copper's importance will surge, particularly in electric vehicles, renewable energy systems like wind and solar power, and battery storage. The demand for copper is projected to double by 2035, highlighting the need for increased supply and efficient recycling.
Despite the U.S. having significant copper reserves, lengthy permitting processes hinder domestic production. Modernizing these processes is vital for sustainability and economic competitiveness, ensuring copper continues to advance civilization as it has for millennia.
AI (Artificial Intelligence) affects copper by significantly boosting its demand due to the metal's essential role in technological advancements. The surge in AI technology, alongside electric vehicles (EVs) and renewable energy infrastructure, drives a substantial need for copper.
AI data centers are particularly copper-intensive, requiring it for power connections and backups. Furthermore, EVs, which use over three times the copper compared to traditional vehicles, contribute to this demand spike.
This increased usage aligns with broader economic trends, such as China’s shift towards green infrastructure.
Consequently, the copper market is experiencing higher prices and greater demand, highlighting its critical role in the global transition to advanced technologies and sustainable energy.
AI and advanced sensor technologies are also being used within the Copper industry to make the industry safer and more efficient. Freeport has converted 30 of its Caterpillar trucks to fully autonomous vehicles which deliver mined products via an autonomous route.
You can visit the investor relations websites of the various companies listed above. They provide loads of investment information and financial projections through press releases, quarterly reports, annual reports, presentations, and corporate blogs.
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